For UK businesses
Bad credit business loans for UK businesses
Late payments, a default or a County Court Judgment can make borrowing harder, and if your bank has already said no, it can feel like the end of the road. It may not be. Lenders can look at more than a credit score. This page explains how lenders may view adverse credit, what they may weigh alongside it, and how to approach an application with your eyes open.
Wize Finance can help businesses, including sole traders and companies, explore funding where there has been adverse credit and access a suitable referral route. Tell us what happened and what you need; each provider makes its own assessment.
Tell us what you need and, if you want to, a little about past credit problems. The team reviews your enquiry and tells you plainly what may be possible.
What “bad credit” means to a business lender
When a lender looks at credit history, it may look at two records, not one.
- Company
Your company’s credit file.
This shows how the business has handled credit and bills: late or missed payments to suppliers and lenders, defaults, CCJs registered against the company, and its filing record at Companies House.
- Directors
Your directors’ personal credit files.
Depending on the lender and the product, lenders may also consider the directors’ personal credit. Personal defaults, missed payments, CCJs or past insolvency can affect a business application, even when the company itself has a clean record.
Lenders may also distinguish between two situations that both get called “bad credit”:
A thin file. There isn’t much history to judge, for example because the company is young or has rarely borrowed. That’s not the same as a poor record.
An adverse file. There’s a record of problems, such as missed payments, defaults or judgments. How recent they are, how serious, and whether they’ve been settled can all matter.
Knowing which one applies to you, and to which record, is the first step to a sensible application.
How lenders look at your case
A credit report is one input, not the whole decision. Lenders may build a picture of the business and the people behind it. Where your credit history is weaker, the other parts of that picture may carry more weight, and some of them are within your control.
| Factor | Plain-English note |
|---|---|
| Credit history (company and directors) | What happened, how serious it was, and whether it’s been settled. |
| How recent the issues are | Lenders may treat older, resolved problems differently from recent or ongoing ones. Where you can strengthen your case |
| Trading history | How long the business has traded and how steady that trading has been. |
| Turnover and bank statements | Regular income, and how the account is run day to day. Where you can strengthen your case |
| Existing borrowing | What the business already owes and how it’s being repaid. Where you can strengthen your case |
| Security available | Whether there are business assets or property a lender could take security over. |
Every lender sets its own criteria and weighs these factors differently.
Business loans with a CCJ or default
A County Court Judgment, or a default recorded on a credit file, is a significant mark for a lender to see. It doesn’t automatically end a conversation, but the detail matters.
Satisfied or unsatisfied
A CCJ is “satisfied” once it has been paid in full. Lenders may treat a satisfied judgment differently from an unsatisfied one, because it shows the debt was dealt with. If you’ve paid a CCJ, make sure the register has been updated. In England and Wales you can ask the court for a certificate of satisfaction.
How long it stays on record
In England and Wales, a CCJ normally stays on the register for six years, but it can be removed if it’s paid in full within one month of the judgment. Scotland and Northern Ireland have their own systems.
Why the explanation matters
A lender reading a file sees dates and amounts, not the story. If a judgment came from a disputed invoice, a one-off cash-flow problem or something since resolved, being ready to explain it clearly, with evidence, can help a lender understand the risk.
Types of finance some businesses explore
Different types of finance lean on different things. Where a lender can rely partly on an asset, your invoices or the business’s security, credit history may be one factor among several. Whether any of these is available for a particular business depends on the lender’s and the product’s criteria.
Borrowing secured against business assets or property. Security can change how a lender looks at the overall risk.
Funding linked to equipment or vehicles, where the asset itself forms part of the lender’s security.
Funding against unpaid invoices, where your customers’ payment record can matter alongside your own.
An advance repaid from future card takings, which some businesses with regular card sales look at.
None of these is a guaranteed route, but each may look at more than credit history alone.
Each has its own costs, terms and risks, explained on its own page. Wize Finance can talk through which may be worth exploring for your business.
Personal guarantees and security
When credit history is weaker, a lender may look for extra comfort. Two forms it may ask for are:
A personal guarantee from one or more directors. A guarantee creates a separate personal obligation under the guarantee terms, so you could be personally liable for the guaranteed debt if the company doesn’t repay.
Security over business assets or property. If repayments aren’t made, the lender may be able to take or sell what was secured. If personal property is offered as security, it could be at risk.
Wondering whether you can borrow without a personal guarantee? Our guide to business loans without a personal guarantee explains what a guarantee involves and the factors a lender may consider.
Before you apply: five practical steps
Declined by your bank?
Different lenders apply different criteria; a decline from one lender does not mean every lender will make the same decision.
- Ask the bank why, if it will tell you.
- Check your credit files for anything you didn’t expect.
- Think about whether more time, more trading history or security could change the picture.
If you'd like to see whether your company could suit a different kind of lender, a short enquiry is a straightforward place to start.
When this page may not be the right fit
Not trading yet, or only just started? A lender may have little history to look at, whatever your credit. See our guide to startup business loans.
Struggling with existing debts? If the business or you personally are finding repayments hard to keep up with, more borrowing may not be the answer. Free, confidential debt advice is available.
Bad credit business loans: common questions
Can I get a business loan with bad credit?
It’s possible, but not guaranteed. Some lenders may consider applications from businesses with adverse credit, looking at the wider picture: trading history, turnover, existing borrowing and any security available. Some may ask for a personal guarantee or security. A clear explanation of past credit problems can help, so it’s worth raising them when you enquire.
What’s the easiest type of business finance to get with bad credit?
No type of finance is “easy” with adverse credit, and anyone who promises otherwise is worth being wary of. Finance that leans on an asset, invoices or other security may weigh credit history alongside those things, but every lender sets its own criteria.
Can I get a business loan with a CCJ?
Some lenders may consider it, depending on the amount, how old the judgment is and whether it has been paid. Lenders may treat a satisfied CCJ differently from an unsatisfied one, and a clear explanation can help.
Does my personal credit history affect a loan for my business?
It can. Depending on the lender and the product, lenders may consider the directors’ personal credit as well as the company’s file. Personal defaults or judgments can affect a business application.
Will I need a personal guarantee?
It depends on the lender and the product. With adverse credit, some lenders may ask for a director’s personal guarantee or security. Read our guide to business loans without a personal guarantee to understand what a guarantee involves.
I’ve been declined by my bank. What can I do?
Find out why if you can, check your credit files, and consider whether a different lender might look at your case differently. A short enquiry is a simple way to have the Wize Finance team review whether your business could suit a funding partner.
How Wize Finance helps
Searching lender by lender with a weaker credit history can be slow and discouraging. Wize Finance aims to make that first step simpler.
Any offer and final decision are made by the lender, not Wize Finance.
- One short check. Tell us about your company and what the funding is for.
- An honest look at your case. We consider your details against the kinds of business our funding partners work with.
- Introduction where it fits. If there’s a realistic route, we introduce your case to suitable funding partners. If there isn’t, we’ll say so.
See where your company stands
A weaker credit history doesn’t have to be the end of the conversation. Start with one short check about your company, and get a clearer picture of the routes you could explore before you apply anywhere.