The Bad Credit Lenders We Reviewed
Tide Funding Options
Capify Business Loan
iwoca Business Loan
365 Finance Merchant Cash Advance
Together Commercial Finance
British Business Bank Start Up Loans
How Bad Credit Business Loans Work
How Lenders Look Past Your Credit File
Specialist lenders assess your business differently: Capify underwrites manually, iwoca reads your live cash flow through Open Banking, and 365 Finance lends on your card takings.
That means a historic CCJ or default need not be the end of it, provided your current trading shows you can service the debt.
Strong recent revenue beats a clean history here. That’s what you’re really judged on.
Secured Bad Credit Lending and Your LTV
If you can pledge property, a secured lender like Together cuts your rate, because the asset offsets the risk your credit file carries.
The trade-off is a lower loan-to-value: expect 50% to 60% against your premises with adverse credit, against 70% to 75% for a clean profile.
Security buys a cheaper rate, not a bigger loan. That’s the catch.
How Bad Credit Funding Reaches You
Speed is a feature here: with Open Banking and soft checks, the lenders we rate can decide the same day and fund within 24 hours, where a bank would simply decline you.
Picture your accountant connecting Open Banking and exporting three months of takings on a Friday while you wait, and the offer lands the same day.
Bad Credit Business Loan Costs and Fees
Interest Rates, Factor Rates and Effective APR
You’ll pay a premium for bad credit: your effective APR runs 40% to 99%, far above a clean-credit loan, because lenders price the higher risk of default into every deal.
The Bank of England base rate is 3.75%, but it barely matters here, as these lenders fund from private capital and price on risk, not the base rate.
We rate a secured route through Together cheapest if you have an asset, with the unsecured specialists costing more for the access they give you.
The asset is what cuts your rate. That’s the lever you have.
Factor Rates and the Total Cost
Watch how Capify and 365 Finance price you: a factor rate, not an APR, so £20,000 at a factor of 1.3 means you repay a fixed £26,000 whatever the timeframe.
Clearing it early saves you nothing, because the cost is fixed upfront, so check the total repayment figure and any processing or origination fee before you sign.
Why Bad Credit Lending Sits Outside FCA Rules
Most bad-credit business lending and every merchant cash advance is an unregulated commercial agreement, so you sit outside the FCA protections a consumer would get.
There’s no interest-rate cap, and a struggling business can be offered a top-up that reprices the whole balance, so don’t roll one advance into another without doing the maths.
Eligibility for Bad Credit Business Loans
What Counts as Bad Credit
Lenders read both your business and personal credit: a low Experian Delphi or Creditsafe score (both run 0 to 100), plus CCJs, defaults, late payments or a past insolvency.
A score below 50 marks your business as high risk to a bank, which is what pushes you toward the specialist lenders on this page.
Bad credit narrows your options, it rarely closes them. That part matters.
CCJs, Defaults and Your Bad Credit Record
If you pay a CCJ in full within one calendar month of the judgment, it’s removed from the register entirely, so your credit file reads as if it never happened.
Pay later and it stays for six years, but a CCJ marked satisfied reads far better to a lender than an unpaid one, so settle it and get the certificate.
Hard Stops on a Bad Credit Loan
Even specialists draw a line: active bankruptcy, a live DRO, IVA or debt management plan, or too little revenue, with Capify and 365 Finance wanting £10,000 a month in card takings.
We rate your recent cash flow the single biggest factor, so a strong trading month does more for your application than any quick credit fix.
How to Compare Bad Credit Business Loan Lenders
Comparing Bad Credit Lenders by Cost
If cost is your priority, convert every offer to a single total repayment figure, because a factor rate and an APR can’t be compared head to head on the headline number.
We rate a secured Together deal cheapest where you have an asset, with the unsecured lenders priced for speed and acceptance rather than value.
Comparing Bad Credit Lenders by What They Accept
Match the lender to your profile: Capify for manual underwriting of CCJs, iwoca for strong cash flow on a thin file, and 365 Finance for steady card takings.
If your file is the problem rather than your trading, a CDFI assesses your viability and character over a score, and can refinance you out of an expensive advance.
Comparing Bad Credit Lenders by Risk and Term
Weigh the risk you take on: a short, high-cost MCA strains your daily cash flow, while a secured loan puts your premises on the line if you default.
The right lender fits your profile and your cash flow, not the fastest yes. That’s the call that protects you.
Who Bad Credit Business Loans Are Best For
Best Bad Credit Loan for Strong Cash Flow
If your trading is strong but your credit file is patchy, iwoca and Capify will lend on your cash flow and look past the history.
We rate iwoca first here, because you only pay interest for the days you use the money and there is no early repayment fee.
Best Bad Credit Loan for Card Sales or Assets
If you take card payments, 365 Finance approves on takings with only a soft check; if you own property, Together gives you the cheaper secured route despite adverse credit.
Picture your accountant emailing a property valuation to the underwriter while you wait to hear what LTV your credit file allows.
When Another Route Beats a Bad Credit Loan
If you invoice other businesses, invoice finance lends against your customers credit, not yours; for equipment, asset finance leans on the kit instead of your file.
A CDFI suits a viable business the lenders keep declining, and a grant beats any loan because you never repay it.
Frequently Asked Questions
Can you get a business loan with bad credit in the UK?
Yes. Specialist lenders such as Capify, iwoca and 365 Finance lend to businesses with CCJs, defaults or low credit scores, underwriting on live cash flow or card takings rather than your history. You’ll pay a higher rate, and a personal guarantee is usually required.
Can you get a business loan with a CCJ?
Often, yes, especially if the CCJ is satisfied (paid). If you pay a CCJ in full within one calendar month of the judgment it is removed from the register entirely. Pay later and it stays for six years, but a satisfied CCJ is viewed far more favourably than an unpaid one.
How much do bad credit business loans cost?
Expect an effective APR of 40% to 99%, or a factor rate of 1.1 to 1.5 on a merchant cash advance. A factor rate fixes the cost upfront, so repaying early doesn’t reduce it. The base rate is largely irrelevant, as these lenders price on risk, not the cost of funds.
Does applying for a bad credit business loan hurt your credit score?
It depends on the lender. A full application usually involves a hard search that leaves a footprint. 365 Finance runs only a soft check on its merchant cash advance, so applying does not mark your file, and comparison tools like Tide Funding Options check eligibility without a hard search.
Is it better to get a secured loan with bad credit?
If you own property, often yes. Pledging an asset to a lender like Together cuts your interest rate sharply versus an unsecured bad-credit loan, because the asset offsets the risk. The trade-off is a lower loan-to-value, typically 50% to 60% with adverse credit, and your property is at risk if you default.
Are bad credit business loans regulated?
Mostly not. Lending to limited companies and merchant cash advances are unregulated commercial agreements outside FCA protection, with no interest-rate cap. That makes it vital to read the contract, check the total cost, and avoid rolling one advance into another, which reprices the whole balance.
How We Reviewed Bad Credit Business Loan Lenders
Ranking criteria. We ranked lenders on what adverse credit they actually accept, the true cost, how they assess you, and the risk you take on. Acceptance and transparency carry the most weight, because bad-credit borrowers are most often caught out by hidden cost.
Data sources. Rates, eligibility and adverse-credit policy were checked directly in June 2026: Capify, iwoca, 365 Finance, Together and Start Up Loans. The CCJ rules were confirmed against gov.uk and Registry Trust.
Update cadence. We re-verify every lender on this page at least monthly, and whenever a lender changes pricing, eligibility or terms. The verification date reflects the most recent full review. Some links on this page are affiliate links, see our editorial policy.
Regulatory note. This is editorial content, not regulated financial advice. Most bad-credit business lending and merchant cash advances are unregulated commercial agreements. Credit is subject to status; compare offers directly before you apply.