There are many factors which can contribute to a business acquiring a bad credit rating or poor credit score. When this happens it can present serious obstacles and major challenges when the business requires finance and loans to acquire much-needed goods, supplies and equipment to remain operational. As specialists in business finance, Jade Finance provides information on the options and opportunities for bad credit finance for business.
Many of the factors that lead to a bad credit situation involve issues which are outside of the control of the business owner while some may be a direct result of their own poor decision-making, errors in forward planning and market assessment or flawed financial management. Issues outside of the control of the business may be unexpected changes in market conditions which cause a downturn in turnover, global economic conditions, situations affecting their customers which flow-on to the business and other external impacts. Most recently the fall-out from the prolonged COVID pandemic has resulted in many businesses facing challenges. When turnover is impacted by restrictions such as lockdowns, businesses face challenges meeting their own commitments, regardless of support offered by government programs.
Bad Credit Lenders
When seeking bad credit finance, many business operators can feel they have no other option but to go it alone and apply to as many banks and finance companies as they can source. Unfortunately this can compound the situation as these multiple applications are reported to credit agencies and can result in a worsening of the credit score.
Major banks especially and some other business lenders operate to strict guidelines which often mean that they simply do not offer bad credit loans. Applicants need access to specialist non-bank lenders that are open to discussions and negotiations with bad credit customers.
As a specialist lender, Jade Finance can provide access to these types of lenders. We’re not talking exorbitant interest rate lenders of last resort and desperation. We’re talking non-bank lenders that take a considered view of the circumstances surrounding the bad credit rating and are prepared to make a loan offer according to individual situations.
Our services are readily available to businesses of all types and sizes that are in a bad credit situation.
Due to the individual nature of this type of loan category, it is not possible to generalise around specific outcomes. Each application is addressed on its own upsides and downsides.
In general however, there are some guidelines and aspects to consider:-
- A bad credit application is by definition a higher risk. As such a higher interest rate would be expected to be attached to any finance offer made. The interest rates advertised by ourselves and other lenders for loans are based on good credit profile applicants for new goods.
- Lenders may not accept the full amount of the loan being requested. The applicant may need to lower the amount by paying some form of deposit or selecting lesser priced vehicles or equipment.
- Due to the higher risk, a lender may request more security be put up against the loan. The goods being purchased would typically be used as security, but additional assets may be required also.
Bad credit finance is not an actual loan product but a category or description of the actual loan applicant. As such, when an application is approved, the business can usually select which particular type of loan they would like for that particular acquisition.
The bad credit loan types for equipment, vehicles, cars and other assets include:-
- Chattel Mortgage
- Rent to Buy
- Commercial Hire Purchase
We also offer a range of other commercial finance products for non-asset acquisitions which may also be available for bad credit loans:-
- Lender Overdraft
- Secured Business Loan
- Insurance Premium Funding
At the initial discussion, your Jade Finance consultant will outline the finance possibilities and options that may suit your particular situation.
Averting Bad Credit Situations
Having a bad or poor credit score or rating can mean long-term challenges for business operators. So averting the situation in the first place or correcting the situation can be a very astute approach. There are set procedures and processes for fixing a credit score which may be of use. These are detailed at MoneySmart.
Engaging advisors and other professionals to assist in decision-making processes may be well-worth the cost if one’s own skills and abilities are not up to the task. While experts will charge for their services there are government resources such as through the states’ small business agencies and others that may offer free resources.
Avoid making a lot of applications for the same loans as these get reported and score negatively on the credit report. Engaging a broker such as Jade Finance avoids this scenario as we can cover off on many lenders for loan quotes without these being reported.
Whatever your circumstances, if you require business finance, reach out and have that conversation with us to see how we may be able to assist you.
Contact Jade Finance 1300 000 008 to discuss bad credit business finance.
DISCLAIMER: NO LIABILITY IS ACCEPTED IF ERRORS OR MISREPRESENTATIONS ARE FOUND IN THIS ARTICLE. THE ARTICLE IS PREPARED AND PRESENTED FOR GENERAL INFORMATIVE PURPOSES AND IS NOT INTENDED TO BE THE SOLE SOURCE OF INFORMATION FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING GUIDANCE AND ADVICE SHOULD CONSULT A FINANCIAL ADVISOR.