How to Get a Commercial Property Loan with Bad Credit

Securing a commercial property loan can be challenging, especially if you have bad credit. But bad credit doesn’t have to be the end to your business dreams. With the right strategies and support, you can still achieve your property goals for your business. This guide will walk you through practical steps to help you overcome this hurdle and get the loan you need.

Understanding Bad Credit and Its Impact

Bad credit typically refers to a low credit score or a history of missed payments, defaults, or financial setbacks. Lenders view bad credit as a higher risk, which can make it harder for a sole trader or business to get approved for a commercial property loan. However, many specialist lenders are willing to look beyond credit history, focusing instead on other factors such as the value of the property, the potential income it can generate, and your overall financial situation.

For businesses of all sizes—from sole traders and small businesses to larger enterprises—we understand the diverse needs and challenges you face. Whether you’re a startup seeking your first commercial property or an established business looking to expand, we could help¹ you find the right solution tailored to your unique situation.

Steps to Secure a Commercial Property Loan with Bad Credit

1. Choose the Right Lender

Not all lenders have the same criteria for approving loans. Some specialise in working with borrowers who have bad credit. These lenders take a more holistic view of your application, considering factors like the property’s value and your ability to manage repayments. Brokers like Rapid Finance could connect you with specialist lenders who are flexible and willing to work with your unique circumstances¹.

2. Offer a Larger Deposit

A higher deposit can significantly improve your chances of approval. By reducing the lender’s risk, you make your application more attractive. Aim for a deposit of 30% or more if possible.

3. Strengthen Your Application

A strong application can make all the difference. Ensure your financial records are accurate and up-to-date. Prepare a detailed business plan that highlights the income potential of the property and demonstrates your ability to manage the loan.

4. Leverage Collateral or Security

Using additional assets or property as collateral could provide lenders with the security they need to approve your loan¹. This shows your commitment and reduces their financial risk.

5. Consider Low Doc Loans

If you’re self-employed or lack traditional financial documentation, a low doc commercial property loan might be the solution. These loans are designed for borrowers who can’t provide full financial statements but can demonstrate income through alternative means, such as bank statements or business activity statements (BAS).

See our low doc home loans for details.

Types of Properties Needed by Businesses of All Sizes

Businesses rely on a wide range of commercial properties to operate and grow. Some examples include:

• Office Buildings: Essential for professional services and growing teams.
• Retail Spaces: Perfect for shops, cafés, and customer-facing businesses.
• Industrial Sites: Warehouses and factories for manufacturing or logistics.
• Mixed-Use Properties: Combining residential and commercial spaces for flexibility.
• Speciality Properties: Medical centres, gyms, and hospitality venues tailored to specific industries.

Even with bad credit, businesses shouldn’t have to miss out on securing the right property for their needs.

How Rapid Finance Could Help

Rapid Finance specialises in bad credit property loans. With years of experience and a strong network of alternative lenders, we help clients find tailored solutions that suit their unique situations¹. Here’s how we could assist:

• Matching You with the Right Lender: We connect you with lenders who are experienced in bad credit scenarios and offer flexible terms.
• Protect Your Credit Score: Unlike lenders, who will leave a 'hard' mark on your credit file. We can view your credit report, without impacting your credit score. Only when we have selected a lender² likely to accept your application will a 'hard' check be done against your credit file by the selected lender. 
• Preparing a Strong Application: Our team helps you gather the necessary documentation and present your case in the best possible light.
• Guided Support: From the initial enquiry to loan approval, we’re with you every step of the way, ensuring a smooth and stress-free process.

Next Steps

Bad credit doesn’t have to stand in the way of securing a commercial property loan. Take proactive steps by exploring flexible lending options, preparing a strong application, and leveraging expert support. Rapid Finance is here to guide you every step of the way¹.

View our commercial property loans page for details and to get started today.

1 - Approval is subject to an applicant's overall profile.
2 - A 'hard' credit check may be run by your selected lender.