Business Loans for Bad Credit

Compare Business Loans for Bad Credit with low rate guarantor loans & borrow up to £15,000

What is a business loan?

If you’ve got a great idea for a new product or company, a guarantor business loan is an excellent option to get it off the ground.

Ideally, you would use your savings or a personal loan from a high street bank, but that’s not always an option. You may want to spread the cost over a period of time if you’re expecting future business growth.

A business loan can work in many different ways to help an established, growing, or new business get going.

A standard business loan will often be based on a company’s performance, sales, or even its affordability. This provides a borrower with the opportunity to reach potential growth or income targets.

A business loan is usually flexible in pricing and could, depending on the lender, cover more than £10,000. So, you could secure the costs for any growth, products or new business.

Can you get a business loan if you have bad credit?

The short answer is yes, you can get a guarantor business loan when you have bad credit, but it’s worth understanding your options before applying.

When you’re starting a new business, or starting off as self-employed, funding can be a real issue. Some lenders may not want to lend money to you when you’re starting a new business, for the same reasons they may avoid lending to self-employed people or those who have a bad business credit rating. With no proof of a businesses profitability or financial history, they may be reluctant to lend to people in these situations.

A guarantor loan can be ideal for those looking for a bad credit business loan. Having a guarantor gives the lenders a reassurance that your repayments will be met, even if you can’t make them yourself. This makes them much more likely to approve you and it also means they can keep their rates lower than other loans aimed at people with bad credit. Always check who can be a guarantor before applying.

If you’re unsure about what guarantor loans are and want to find out more information check out our guides.

What affects my business credit score?

Just like an individual, a business can have its own credit score that’s affected by what comes up on its credit history. As with a personal credit score, a business credit score will be negatively affected by poor financial performance.

This doesn’t mean if you aren’t turning a profit, it’s more connected to the overall finances of the business. The main causes for a low business credit score are missed loan repayments, multiple failed credit applications and bankruptcies. Applying for a guarantor loan makes you more likely to be accepted, which can help in two factors; first of all, you’ll avoid being rejected by the lender, which can then have a knock-on effect on your business credit score as you’ll have been accepted for a credit agreement and then have the chance to make payments on time.

How to repair your business credit score

If you’re looking to repair and improve your business credit score there are a number of steps to make. There’s no single thing that will suddenly repair your credit score, it’s more of a mixture of a number of things. The below are simply a few suggestions for things that may help, it’s not an exhaustive list:

  • Share your data with Credit Reference Agencies (CRA) – the more data you can share, the more they’ll know about your business and situation. Registering with one also makes your business known, which helps when applying for credit.
  • Keep an eye on your own personal finances – This is even more important if you’re a new business. When you’re starting a new business and have little financial history available for your business lenders may look at your own financial history and credit score.
  • Keep your records up to date – if you’ve made any changes to your business, such as your address or business status, you should be communicating this with the correct people. This includes your CRA.
  • Pay your bills promptly – this is key for personal finances too. Paying in full and on time shows creditors that you are responsible. Paying late will have a negative impact, but consistent on-time payments will work for you.
  • File your records on time – submitting your accounts or other records late may have a negative affect.
  • Keep your credit applications down – too many may make your business appear to be struggling with funding, which lenders will be concerned about

Finally, taking out a guarantor business loan can help improve your business credit rating when combined with other positive steps. Being approved for a credit deal like a loan and making repayments promptly and in full will reflect well on your credit score.

Compare & apply for a business guarantor loan today

At Guarantor Loans we can help you find the best deal on a guarantor business loan. You can compare business loans using the tool on our home page. If you find a business loan that works for you then you can apply for a guarantor business loan with one of our lenders through us.

We understand that everyone’s situation is different and our extensive knowledge of guarantor loans means we can help you find the best loan for your business.