Quick answer
Once a bankruptcy has ended, you can apply for a business loan secured on property you own, or property a partner or family entity offers. A past bankruptcy is never disqualifying on its own. The lender looks mainly at the equity, how the property came to be held and a clear plan to repay. Loans run from $20k to $5m, for business purposes only.
Key points
- Most secured borrowing waits until the bankruptcy has ended and the trustee has finished with your assets
- A bankruptcy can stay on a credit report for years after discharge, but property equity carries more weight
- How and when the property was acquired, and in whose name, is the first thing to show
- A partner's or family trust's property can be offered as third-party security
- Say upfront what happened and when; surprises later cost more time than the history itself
- Amounts
- $20k – $5m
- Credit
- Bad credit, defaults and ATO debt considered — never disqualifying on its own
- Borrowers
- Companies, trusts and sole traders, including start-ups
- Enquiry
- 60-second loan check — no credit check to find out
A past bankruptcy doesn’t end your ability to borrow for a business. It changes what a lender needs to see. Once you’re discharged and you own property with equity, or someone close to you is willing to offer theirs, a private secured loan can be possible, because the decision rests mainly on the property and the plan to repay rather than on a credit score.
This page is for people rebuilding after a personal bankruptcy or debt agreement. If your credit trouble is defaults, judgments or ATO debt without a bankruptcy, our page on bad credit secured business loans is the better starting point.
Can you get a secured business loan after bankruptcy?
Yes, in many cases. Bad credit, defaults and ATO debt are considered here and are never disqualifying on their own, and a discharged bankruptcy is treated the same way. What a lender needs is:
- a bankruptcy that has ended, or at least a clear account of where it stands;
- property with equity, owned by you, your business or a related party willing to offer it;
- a business purpose for the money;
- a believable exit, meaning a defined way the loan will be repaid.
Loans run from $20k to $5m, by first mortgage, second mortgage or caveat, over residential, commercial, industrial or rural property or vacant land.
Why does the timing of your bankruptcy matter?
Because what you can offer depends on where you are in the process. Moneysmart explains that “You stay bankrupt for three years (subject to extension in certain circumstances)”, and that during that time “A trustee looks after your affairs and sells certain of your assets to help pay your debts.”
| Where you are | What it usually means for secured borrowing |
|---|---|
| Currently bankrupt | Own-name property borrowing generally waits. Talk to your trustee before any new credit |
| Recently discharged | Possible, once it’s clear which property is yours and free of the trustee’s interest |
| Discharged some years ago | Assessed much like any other application, with the history noted |
| In a debt agreement | Considered case by case; say whether it’s finished or still running |
Moneysmart also notes that bankrupts “can’t be a director of a company without court permission”, which matters if your plan involves a company borrowing while you’re still bankrupt.
How long does a bankruptcy stay on your credit file?
Longer than the bankruptcy itself. The OAIC’s guide to what stays on a credit report says bankruptcy information is kept until the later of “5 years starting on the day you became bankrupt” or two years from the day the bankruptcy ended. Defaults and court judgments each stay for 5 years. Moneysmart adds that your name stays on the National Personal Insolvency Index permanently.
For a bank, that history can mean an automatic no for years. For a property-secured private lender, it’s context. The equity in the property and the exit carry more weight than the file.
Whose property can secure the loan?
This is usually the most important question after a bankruptcy, and the answer shapes everything else.
| Who owns the property | How it can work | What to have ready |
|---|---|---|
| You, bought after discharge | Your own first or second mortgage | Contract or title showing when and how it was bought |
| You, held through the bankruptcy | Possible once the trustee’s position is clear | Correspondence from your trustee confirming the property’s status |
| Your partner or spouse | Third-party security for the business’s loan | Their ID and independent legal advice |
| A family trust or company | The entity offers its property; the trustee or directors sign | Trust deed or company extract |
Whoever owns the property signs the mortgage. When a partner or relative offers their home, they should understand they’re putting it at risk for a debt that isn’t theirs, which is why independent advice isn’t optional.
What does the assessment look at after a bankruptcy?
Much the same as any secured loan, with a few extra questions:
- The equity. We lend up to 80% of value on residential security and up to 70% on commercial, lower on large acreage, counting every existing debt.
- The property’s history. When it was bought, with what money, and that nothing from the bankruptcy is still attached to it.
- The purpose. A new business, stock, equipment, a tax bill or a premises fit-out are all common.
- The exit. A sale, a refinance to a mainstream lender once the file has aged, or business income building over the term.
- The story. What led to the bankruptcy, and what’s different now. A short, honest explanation helps.
There’s no minimum trading period or turnover, so a business restarted after discharge can apply from day one. If the property is there, a 60-second check will tell you where you stand.
Illustrative example: restarting a trade business
Illustrative example only; the person and figures are made up.
A Gold Coast tiler went bankrupt after a builder collapsed owing him money. Four years after discharge he’s trading again as a sole trader with strong forward work, and he and his wife bought a townhouse two years ago, now assessed at around $800k with $450k owing to their lender. He needs $120k for a work vehicle, tools and a materials account to take on a larger commercial job.
His bank declines because of the bankruptcy on his file. A private second mortgage behind the existing loan is considered instead. Illustrative: at an 80% residential limit, total debt on the townhouse could reach $640k, leaving up to $190k of room behind the bank. His wife signs as co-owner after independent legal advice. Interest is capitalised, so there’s nothing to pay for the first 6 months, and the exit is a refinance once the job’s payments come through and his file has aged further.
What helps an application after bankruptcy move quickly?
- Lead with the dates. When you became bankrupt, when it ended, and any debt agreement since.
- Have your discharge paperwork and any trustee letters ready.
- Show how the property was acquired: the contract, the settlement statement or the title.
- Line up every owner. Every registered owner signs and verifies identity.
- Name the exit clearly and bring evidence where you can, such as a contract, a listing or a refinance plan.
With those in hand, funding can happen in as little as 24 hours from a clean, complete application. Our documents checklist lists the rest.
When isn’t a secured loan the right move after bankruptcy?
Be cautious if the business can’t yet cover its running costs, if the only exit is hoping things improve, or if the property belongs to someone who doesn’t fully understand the risk. A secured loan used to prop up a business that isn’t viable can put a family home in the firing line. In those cases, speak to your accountant first. Our guide to exit strategy red flags is worth reading before you apply.
Rebuilt and ready to grow? See if you qualify
Coming back from a bankruptcy takes real work, and plenty of business owners who’ve been through it go on to build something stronger. Having access to capital when an opportunity appears is part of that.
Our loan check takes about 60 seconds and there’s no credit check just for asking, so your file stays untouched while you find out. Your enquiry comes to us alone as the direct lender; it isn’t passed around to multiple lenders who’ll all ring you. A secured-lending specialist reads your situation and calls you. Please be upfront and accurate about the bankruptcy dates and the property; it’s what lets us give you a real answer first time.
Frequently asked questions
How soon after discharge can I apply?
There's no fixed waiting period with us. What matters is that the bankruptcy has ended, the property you're offering is clearly yours or the owner's to offer, and there's a believable way to repay. Many applicants come to us within the first year or two after discharge.
Can I borrow while I'm still bankrupt?
Generally not against your own property. While you're bankrupt a trustee looks after your affairs, and Moneysmart notes you can't be a company director without court permission. Speak to your trustee before taking on any new borrowing during that period.
My partner owns our home. Can it secure a loan for my new business?
Possibly, as third-party security. Your partner would sign as owner and usually as guarantor, and should get independent legal advice before agreeing. The loan still has to be for a business purpose and have a clear exit.
Will my bankruptcy show up when you check my credit?
It may. The OAIC says bankruptcy information stays on a credit report until the later of five years from the day you became bankrupt or two years after it ended. Tell us about it in the enquiry so the assessment starts from the full picture.
I was in a debt agreement rather than bankrupt. Is that treated the same way?
It's considered on the same footing: case by case, with the weight on equity and the exit. Let us know whether the agreement is finished or still running, as that changes what's needed.
Does a past bankruptcy mean a higher price?
Each loan is priced on its own security, gearing, term and exit, and we aim for the sharpest price your situation allows. A strong property and a firm exit usually count for far more than the history.