Best Business Loans for Bad Credit in the UK

Bad credit business loans are funding options designed for UK companies whose credit history includes defaults, CCJs, missed payments or a low credit score. They exist because many lenders weigh a business’s recent trading performance, cash flow and available security more heavily than the owner’s past credit record. This guide explains the main options, compares several well-known lenders fairly, and shows how a broker can match your situation to the wider market.

Greenwood Capital is a Manchester-based, whole-of-market finance broker. We are not a lender, and this page is educational information rather than financial advice. Always confirm current rates, fees and eligibility directly with any lender before you commit.

What counts as a bad credit business loan?

A bad credit business loan is any commercial finance facility offered to a business with an impaired credit profile, either at the company level or through the owner’s personal record. There is no single official definition of “bad credit”, but common triggers include a low commercial credit score, historic County Court Judgments (CCJs), previous defaults, arrears or a thin credit file for a newer business.

Adverse credit does not automatically rule out funding. Lenders in this space tend to focus on whether the business can afford the repayments now, based on turnover, bank statements and, where relevant, assets or property that can act as security.

What is a secured business loan, and what are the main types?

A secured business loan is finance backed by an asset, such as commercial property, equipment or invoices, which the lender can recover if the loan is not repaid. Because the security reduces the lender’s risk, secured lending is often more accessible to businesses with adverse credit and can support larger amounts or longer terms than unsecured options.

The main types of secured business finance include:

• Property-backed term loans: a lump sum repaid over a fixed term, secured against commercial or sometimes residential property. Useful for larger, planned spending.
• Commercial mortgages: longer-term loans (often 10 to 25 years) used to buy or refinance business premises, secured on the property itself.
• Bridging finance: short-term secured lending, typically arranged to move quickly and repaid within months from a defined exit such as a sale or refinance.
• Asset finance: funding secured against equipment, vehicles or machinery, including hire purchase and leasing, where the asset itself is the security.

Many bad credit options, by contrast, are unsecured and short-term, relying on trading performance rather than an asset. Both routes have a place, and the right one depends on your credit profile, what you own and how quickly you need funds.

How we chose the lenders on this list

As a whole-of-market broker, we do not favour any single lender, and no one on this list has paid for placement. We selected providers that are well established in the UK, transparent about how they assess applications, and known for working with businesses that fall outside mainstream bank criteria.

Our aim is to show the range of what is available, from short-term unsecured facilities to revenue-based and merchant-linked products. The “Best for” labels are general signposts, not recommendations. Your own eligibility, pricing and terms will depend on your specific circumstances and the lender’s current criteria.

Business loan options for bad credit: a shortlist

Capify, best for merchant cash advances and short-term funding

Capify is a UK small business lender offering short-term business loans and merchant cash advances, where repayments are taken as a percentage of daily or weekly card and bank takings. This structure can suit retail, hospitality and other card-heavy businesses with variable income, because repayments flex with sales.

Capify typically looks at recent trading and card volumes rather than credit history alone, which can help businesses with some adverse credit. Watch-outs: merchant cash advances are priced with a fixed fee rather than an APR, so it is important to compare the total cost of funds and the effective cost over your expected repayment period. Confirm current pricing and terms directly.

Fleximize, best for flexible repayment features

Fleximize is a UK lender offering secured and unsecured business loans, often described as revenue-based, with features such as repayment holidays, top-ups and no early repayment penalties on some products. It tends to suit established businesses (usually trading for a minimum period with a minimum turnover) that want flexibility.

Fleximize considers the wider business picture, so a strong trading record can offset a less-than-perfect credit history. Watch-outs: minimum trading and turnover requirements mean it is less suited to very new businesses, and pricing varies by risk profile and whether the loan is secured. Check current rates and criteria before applying.

iwoca, best for fast, flexible small-business credit

iwoca is a UK fintech lender providing flexible business credit, including its Flexi-Loan, with fast online decisions and the ability to draw and repay funds as needed. It is often used for smaller amounts and short-term cash flow, with interest charged only on the balance you use on flexible facilities.

iwoca assesses businesses using bank data and trading performance, which can benefit those with a limited or imperfect credit file. Watch-outs: the fastest, most accessible facilities tend to be for smaller sums, and rates vary considerably by profile, so a stronger business will usually see better pricing. Confirm your indicative terms directly.

Nucleus Commercial Finance, best for secured and asset-backed lending

Nucleus Commercial Finance is a UK lender offering a range of business finance including secured term loans, asset-based lending and property-backed facilities. Its secured products can suit businesses that have assets or property to offer as security and want larger amounts or longer terms than typical short-term lenders provide.

Because security reduces lender risk, this route can be worth exploring where credit history is a barrier but the business owns worthwhile assets. Watch-outs: secured lending puts the pledged asset at risk if you cannot repay, and larger facilities involve more documentation and longer timelines. Check current criteria and pricing.

Liberis, best for revenue-linked funding tied to card sales

Liberis provides business cash advances repaid as a percentage of future card takings, so repayments rise and fall with your sales. It is often used by small and seasonal businesses in retail, hospitality and services that take card payments and want repayments to track income.

The focus on card turnover means credit history is one factor among several, which can help some businesses with adverse credit. Watch-outs: as with any advance priced as a fixed fee, compare the total cost against alternatives, and consider how repayments behave in quieter trading periods. Confirm current terms directly.

365 Business Finance, best for unsecured merchant cash advances

365 Business Finance offers unsecured merchant cash advances to small UK businesses, with funding based on average monthly card takings and repayments collected as a share of card sales. It typically requires no fixed monthly payment and no traditional security, which can appeal to card-based businesses that lack assets to pledge.

Eligibility leans on card turnover and trading history rather than credit score alone. Watch-outs: advances are best suited to businesses with steady card income, and the fixed-fee structure means you should compare total repayable and the effective cost over time. Check the latest terms directly.

Comparison table

Rates and eligibility change and depend on your circumstances, so treat this table as a starting point and verify current figures with each provider.

A worked scenario: weighing two options

Consider a small café with a CCJ from two years ago, monthly card takings of around £18,000, and no property to offer as security. The owner needs roughly £15,000 to refit the kitchen and wants predictable repayments to plan around.

A merchant cash advance from a provider like Capify or 365 Business Finance would flex with card sales, which helps in quieter months, but the fixed-fee cost and the drag on daily takings need weighing against the benefit. Alternatively, an iwoca facility could offer a clearer sense of a set balance and interest only on what is drawn, though the pricing would reflect the adverse credit and the amount available may vary.

The right choice depends on how stable the card income is, how quickly the owner wants to clear the debt, and the total cost of each. There is no universally “best” answer, which is exactly why comparing several offers side by side matters. This is an illustration, not advice about your own business.

How to choose for your situation

Choosing a bad credit business loan comes down to matching the product to your credit profile, cash flow and what you can offer as security. Ask yourself the following questions before you compare offers.

• How is my income structured? If most sales come through card terminals, a revenue-linked advance may fit. If income is regular and predictable, a fixed-term loan may be simpler.
• Do I have security to offer? Property or valuable assets can open up secured lending, often with larger amounts and longer terms, at the cost of putting that asset at risk.
• How quickly do I need funds? Some online lenders decide in days, while secured or property-backed facilities take longer because of valuations and legal work.
• What can I comfortably repay? Base this on realistic cash flow, including quieter periods, not your best month.
• What is the total cost, not just the headline? Compare the full amount repayable, fees included, across the actual expected term.

What to check before you commit

Before signing any agreement, check the total cost of borrowing, the security or personal guarantee required, and the flexibility to repay early or top up. These details often matter more than the headline rate, especially with adverse credit pricing.

• Total repayable and effective cost: for fixed-fee products, work out the cost over the real repayment period, not just the fee percentage.
• Personal guarantees: many business loans require the owner to guarantee the debt personally, which puts your own assets at risk if the business cannot pay.
• Security at risk: for secured lending, be clear on exactly what could be repossessed and under what conditions.
• Early repayment terms: check whether you can settle early and whether that saves interest or triggers charges.
• Fees: arrangement, valuation, legal and any default fees. Ask for these in writing.
• Impact on your record: confirm how the facility is reported and whether applications leave a hard footprint on your credit file.

Let Greenwood Capital compare the market for you

Adverse credit narrows your options, but it rarely closes the door completely, and the right fit is often not the first lender you find. Rather than applying to several providers and risking multiple credit searches, it can help to see the market side by side.

Greenwood Capital is a whole-of-market broker based in Manchester. Tell us about your business, your credit situation and what you need the funds for, and we will help you understand the options and match your circumstances to suitable lenders. This is general help to inform your decision, not financial advice. Get in touch to start a no-obligation conversation.