Your Guide to Getting a Business Loan with a Low Credit Score
Securing funding can be harder when a business has a low credit score, but poor credit history does not always rule out finance. Some lenders look beyond the score and consider turnover, cashflow, trading history, affordability, and the reason for borrowing.
This guide explains what a low business credit score can mean and how to prepare before applying.
Understanding your business credit score
A business credit score reflects how credit reference agencies view your company’s financial health and repayment history. Different agencies use different models, so there is no single universal score.
Lenders may consider:
- Payment history
- Filed accounts
- County Court Judgments
- Existing borrowing
- Company age
- Director profile
- Public records
- Bank statement conduct
A low score can make funding more difficult, but lenders may still review the wider business position.
What is a low credit score for a UK business?
The meaning of “low” depends on the credit agency and scoring model. As a general guide, lower bands indicate higher perceived risk.
| Credit agency | Score range | Typical rating |
|---|---|---|
| Experian | 0-50 | Very low |
| Experian | 51-70 | Low |
| Experian | 71-80 | Fair |
| Experian | 81-100 | Good to excellent |
| Equifax | 0-15 | Low to very low |
| Equifax | 16-30 | Fair |
| Equifax | 31-50 | Good |
| Equifax | 51-100 | Excellent |
These ranges are only a guide. Lender criteria can change, and each application is assessed on its own facts.
Will a bad credit business loan cost more?
Bad credit business loans often carry higher costs than loans for businesses with strong credit profiles. This is because lenders price for risk.
The key is to compare the total cost and make sure repayments are affordable. A loan should support the business, not create a larger cashflow problem.
Options that may be considered
Specialist or alternative lenders may consider applications where high street banks would not. The right option depends on the business profile and funding purpose.
Possible routes include:
- Short-term business loans
- Working capital finance
- Merchant cash advances
- Asset finance
- Invoice finance
- Secured lending, where appropriate
Availability depends on lender appetite, affordability, trading history, and the details behind the credit issue.
Can I get a business loan with a CCJ?
It may be possible to get a business loan with a County Court Judgment, but it is more challenging. Some lenders will decline automatically, while specialist lenders may ask for more information.
They may want to understand:
- When the CCJ was registered
- Whether it has been satisfied
- Why it happened
- Whether cashflow has improved since
- Whether current bank statements support repayment
Transparency is important. Trying to hide a credit issue usually slows the process down.
How to improve your chances
Before applying, gather clear evidence and make sure the funding request is realistic.
Useful preparation includes:
- Checking your business credit file
- Preparing six months of business bank statements
- Explaining any historic credit issues clearly
- Reducing avoidable returned payments
- Confirming the exact funding purpose
- Reviewing whether repayments are affordable
Working with a broker
A broker can help identify lenders that may be open to your profile before you make multiple applications. That can be useful where credit history is complex.
Fundify Funding helps UK SMEs compare business finance options through one enquiry. We are a broker, not a lender, and funding is subject to lender criteria and affordability.
