Bad credit business loans: no judgement, your equity decides

Credit files get damaged in good businesses all the time. A major customer goes into administration owing you three months of invoices. A partnership ends badly. Someone gets sick, a supplier pulls credit terms, a tax bill lands in the same quarter as a slow season. None of that makes you a bad operator, but it can leave a mark that a bank’s computer reads as a hard no.

We look at it differently. If you own Australian property with equity in it, and you need money for a business purpose, the state of your credit file is not what decides the loan. Your equity does. We don’t ask you to justify the past or apologise for it. We ask what the money will do, what the property is worth, the balance of any mortgage on it, and the plan for paying us back. Then we give you a straight answer.

This page explains how bad credit business loans work with us, which credit problems we see most, what we still need from you and how to check your deal without leaving another mark on your file.

Why we don’t judge a credit file the way a bank does

A bank’s business lending model is built around predicting monthly repayments over many years from trading income. A credit score is a shortcut to that prediction, so one red flag can end the conversation before a person ever reads your story.

Our loans are a different kind of bet. They are secured by a mortgage or caveat over real property, they run on open terms, and they are repaid from a specific event, such as the sale of a property, a refinance once the file is clean, a large contract paying out or a tax refund arriving. When there is solid equity behind the loan and a believable way out, the past matters far less than the plan.

That’s why credit issues are never disqualifying on their own here. We still read the file, because it tells us what happened and what needs fixing. But it’s context, not a verdict.

How a bank usually reacts	How we look at it
A default trips an automatic decline	We ask what caused it and whether it’s been paid or will be paid from the loan
ATO arrears mean no new lending	Clearing the ATO is often the reason for the loan
Under two years of trading means wait	Start-ups can borrow if there’s property and a purpose
Tax returns behind means no assessment	There’s no serviceability test, so we focus on the exit
Several recent enquiries look risky	We want to know what you’re trying to fix, not count enquiries

What does “your equity decides” mean in practice?

It means the numbers on the property do most of the talking. Total lending on the security, including any existing mortgage and our loan, can reach up to 80% of value for houses, units and townhouses, and up to 70% for commercial, industrial, retail and office buildings. Large acreage and vacant land are geared more conservatively.

Here’s a simple illustration. A business owner has a house worth around $1,000,000 with $450,000 still owing to the bank. Eighty per cent of the value is $800,000, so there’s room for roughly $350,000 more, behind the bank as a second mortgage or as a fresh first mortgage that pays the bank out. Defaults on the owner’s file don’t change that arithmetic. They only change what we talk about on the call.

You can get a first read on your own figures with the borrowing calculator, or skip straight to Check my deal, which takes about a minute.

The credit problems we see every week

You would be surprised how ordinary most of these are. In no particular order:

• Defaults. Paid or unpaid, recent or old. If they’re still owing, the loan can usually clear them at settlement.
• Court judgments. Often from a supplier or landlord dispute. Paying the judgment creditor out of the loan is usually the tidiest fix.
• ATO arrears. Overdue BAS, a defaulted payment plan, a garnishee notice or a director penalty notice. Our page on business loans for tax debt covers this in depth.
• Missed repayments. Late months on a car loan, a credit card or an equipment lease that show up in repayment history.
• Expensive online loans. Daily or weekly debits that are draining the account. We can refinance online business loans into one facility with nothing to pay for six months.
• A loan already in default. If another lender has issued a default notice, see refinancing a loan in default.
• A past bankruptcy or debt agreement. Considered on its merits, provided the property is yours to offer.
• A bank that has simply said no. Sometimes there’s nothing wrong with the file at all, only a policy mismatch. Our page on refinancing after a bank decline walks through what’s possible.

The OAIC publishes how long each type of information can stay on a consumer credit report, and some of it lingers for five years or more. Waiting for a file to clean itself up can cost a business far more than the problem did in the first place.

What we still need from you

No judgement doesn’t mean no questions. A few things are non-negotiable, and being upfront about them saves everyone time.

1. Property with equity. A house, unit, shop, factory, warehouse, farm or vacant block anywhere in Australia. It can be owned by you, your company or your trust, and a family member can offer their property as third-party security.
2. A business purpose. Tax, suppliers, wages, stock, equipment, a buyout, a property purchase or clearing business debts. We don’t fund personal or household spending.
3. A believable exit. How will the loan be repaid? A sale, a refinance once the credit file is repaired, a contract payment or a refund all count. Our guide on exit strategy red flags shows what makes a plan convincing.
4. The whole story, early. Tell the specialist everything on the first call, including the uncomfortable bits. Surprises found halfway through a deal slow it down; problems disclosed upfront rarely do.

That’s it. No minimum trading period, no turnover test, no serviceability calculation, and no sworn valuation, because we assess the property ourselves.

How a bad credit business loan can repair the damage

The best loans in this space don’t just buy time. They remove the thing that was hurting the file in the first place.

Picture a business with an ATO debt that is accruing interest, two supplier judgments and a short-term online loan taking a slice of every day’s takings. A property-secured loan can pay all of them at settlement, directly to each creditor. The day after, there is one lender, one balance and nothing to pay for six months. That breathing space is usually enough to bring lodgements up to date, rebuild a run of clean months and line up a cheaper refinance.

The ATO can report certain overdue business tax debts to credit reporting bureaus once they pass set thresholds, so clearing tax arrears early can also keep a fresh problem off the file. The guide how ATO debt lands on a credit file sets out when that can happen.

Repayments built for a business catching its breath

Bad credit usually comes with tight cash flow, so we structure repayments around giving you room rather than taking it away.

• The first six months: zero out of your account. We capitalise the interest, so it sits on the loan and your bank balance is left alone.
• After that: interest-only monthly payments. The principal waits for your exit.
• Open terms. No set end date in either direction, so a slow refinance won’t tip you into default.
• Early repayment welcome. Pay down in lumps when cash arrives, or repay in full at any time with no penalty.

We never publish interest rates, because each price is built around your property, the LVR, the structure and the exit. Our job is to give you the sharpest price your situation allows, and the Letter of Offer sets out every cost before you sign.

Which structure suits a damaged credit file?

Your situation	What usually fits
The bank wants you out, or has declined a refinance	A private first mortgage that clears the bank
Your bank loan is fine but other debts are in trouble	A second mortgage that leaves the bank where it is
A small amount, needed urgently	A caveat loan, which can later become a registered second mortgage
The property is debt-free	A first mortgage, with no other lender to consult

If you’d like the deeper, structure-by-structure detail, our companion page on bad credit secured business loans covers retention periods, bankruptcy and the documents that help.

How to check your deal without another mark on your file

Check my deal asks five quick things: the loan, the property, the borrower, the exit and your contact details. Your indicative equity and LVR appear on screen, and a secured-lending specialist reads your answers and calls you, usually within the hour during business hours. Nothing is run against your credit file at this stage.

Prefer to talk first? Ring 1300 93 83 87 and tell us what’s happened. You won’t get a lecture. You’ll get a clear yes, a clear no, or an honest “here’s what would make it work”.

Funds can be released in as little as 24 hours from a clean, complete scenario, meaning accurate figures, statements for anything owing on the property and an exit we can see. Most delays come from paperwork, not from the credit file.

Bad credit, good equity? Let’s talk

If the property has the equity and the business needs the money, your credit history isn’t the end of the road. Plenty of owners who were turned away by a bank are now using a property-secured loan to clear the debts, steady the cash flow and get back to a lender of their choice on their own timetable. For the wider case for this kind of lending, read the benefits of secured business finance.

Check my deal now and find out in about a minute where you stand.