Business loans for bad credit - borrowing options explained
Struggling to get finance due to a poor credit score? You’re not alone. Many UK businesses face challenges that affect credit history. The good news is some lenders offer business loans for bad credit, though terms may differ.
Funding Options by Tide works with 80+ UK lenders, including specialists in supporting businesses with imperfect credit. Compare offers and find the right funding solution for your needs.
What is a bad credit business loan and how it works
What is a bad credit business loan?
These are loans designed for businesses whose credit score or financial history might stop them from getting approved with mainstream lenders. They can take the form of secured loans, unsecured loans or alternative products such as a merchant cash advance.
The lender looks at your overall situation—turnover, cash flow, assets and repayment ability—not just your credit report.
How do they work?
You apply with details about your business, accounts and bank statements.
Lenders assess your application based on more than just credit score.
If approved, you receive the funds as a lump sum or a flexible line of credit.
Repayments are made over time with interest, just like standard business loans.
The main difference is that lenders may charge a higher rate of interest, request a personal guarantee or ask for security against business assets.
Loan types available to businesses with bad credit
Unsecured business loans
Funding based on creditworthiness and turnover, no collateral required. Explore unsecured loans
Secured business loans
Funding backed by assets such as property or equipment. Learn about secured loans
Merchant cash advance
With a merchant cash advance, you get a lump sum payment and in return the lender gets a percentage of future revenue, up until the total amount plus fees is repaid.
Invoice finance
If you work in B2B, you may be used to waiting long periods for funds to be delivered since many industries come with standard 30, 60, and 90 day payment terms. Invoice finance gives you access to those funds earlier.
Asset finance
There are several different types of asset finance. One type enables you to use an asset to gain funding, while another enables you to spread the cost of purchasing an asset. Since the asset is used as security, the lender may require a lower credit score from the applicant to grant a loan.
Revenue-based finance
Repayments scale with your turnover. See how it works
Estimate your costs today
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 9.7% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,291.56. The total amount payable is £54,997.44
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 8.2% APR
Repayment period
1 month to 30 years terms
Can I get a business loan with poor credit?
Yes – but expect stricter terms. Lenders may:
Charge higher interest rates
Offer lower borrowing limits
Request security or personal guarantees
The good news is that some lenders focus on helping businesses rebuild their credit while still accessing the funds they need.
Tips to improve approval chances
Provide up-to-date financial documents and clear cash flow forecasts.
Offer security, if available, to reduce the lender’s risk.
Show trading stability with steady revenue, even if past credit issues exist.
Demonstrate how funds will support growth or stability.
Alternatives to business loans with bad credit
Merchant cash advance
Repayments are taken as a % of card sales
Invoice finance
release cash tied up in unpaid invoices
Asset refinance
Borrow against existing equipment or vehicles
Revenue-based finance
Repayments flex based on monthly turnover
Guarantor loans
A director or third party provides security
Pros and cons of bad credit loans
Interesting bits
Pros | Cons |
Access to funding when mainstream lenders say no | Higher interest rates than standard loans |
Variety of options: secured, unsecured, alternative | May require collateral or personal guarantees |
Can help rebuild business credit with consistent repayments | Lower borrowing limits compared to prime borrowers |
Fast approval with some specialist lenders | Missing payments can worsen credit further |
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How does Funding Options work?
Tell us how much you need
We’ll ask a few questions about your business and the reason for your loan.
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Our smart technology will compare quotes from up to 80+ lenders to help you find the ideal business loan.
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Why choose Funding Options by Tide?
Funding Options by Tide helps UK SMEs find fast, tailored business finance by connecting them with over 80 trusted lenders. Backed by Tide and FCA-regulated, the service is free and easy to use.
Compare 80+ UK lenders in minutes
We scan the market so you don’t have to, finding the right option for your business.
Trusted by 17,000+ UK businesses
From startups to established SMEs, we’ve already helped secure over £1bn in funding.
FCA-regulated and Tide-backed
We operate as a credit broker, not a lender, giving impartial access to multiple finance products.
Excellent customer experience
Our Trustpilot rating is 4.8 out of 5, based on 1,300+ independent reviews.
Personalised support
Our team can guide you through the process and help you choose the finance that fits your needs.
Learn more about business loans for bad credit
Can I get a loan with a County Court Judgment (CCJ)?
Some lenders accept CCJs if you can show strong revenue or security.
Will applying affect my credit score?
Yes. Applications usually involve a credit check. Too many applications in a short period can lower your score.
What’s the maximum I can borrow with bad credit?
It depends on turnover, assets and the lender. Secured loans typically allow higher borrowing than unsecured.
Can repaying a bad credit loan improve my credit rating?
Yes. Making regular repayments on time can help rebuild your business credit profile.
Are startups eligible?
It’s more difficult, but not impossible. Some products, like a merchant cash advance, may be more suitable.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Joe Morley
Business Finance Lead
Joe has been helping UK businesses secure the funding they need since 2015. Over the years, he’s supported hundreds of SMEs in accessing millions of pounds for everything from purchasing essential assets to unlocking working capital for day-to-day operations. As Head of Sales at Funding Options, Joe leads a large team of expert Business Finance Specialists dedicated to finding the right solution for every customer. His goal is simple - to make securing finance straightforward, stress free, and tailored to each business’s needs.