Bad Credit Business Loan Finance

Bad credit truck funding may be sourced through specialised lenders. Any offers made will be dependent on the lender guidelines and subject to a review of the creditworthiness of the applicant. As small enterprises, owner operators can expect that a review of their personal credit profile will   form an integral part of the application approval process. This is a specialised area and all applications are addressed based on the individual aspects of the owner-operator.

The loan terms offered for poor credit funding will be dependent on individual lender guidelines. Terms of up to 7 years can be achieved for truck and equipment funding for applicants accepted by lenders. Each bad credit application is addressed individually and any offers made accordingly.

The rates, terms and conditions advertised by lenders are typically for applicants that have a good credit rating. Applicants with a lower rating may expect a higher interest rate and additional conditions on the funding. These may include additional security required, a limit on the total loan amount and others. Any special conditions would be advised when a quote is obtained.

No. Low Doc and No Doc funding is for enterprises that do not have all the financial records and documentation that is required to fully complete the application form. These applicants may have a good credit rating but not the documentation. Bad credit applicants may have full documentation.

Yes. Where an applicant is accepted for bad credit funding and accepts a lender offer, all the relevant tax deductions may be realised. The tax benefits vary across the selection of products – Chattel Mortgage, Lease, CHP and Rent to Own. When funding is finalised, the borrower receives may be entitled to claim the relevant deductions associated with the product selected.

It may be expected that the personal credit history and financial position of owners and directors of enterprises applying for bad credit funding would be reviewed. This may be especially relevant to small enterprises such as partnerships, sole traders and owner-operators. Personal guarantees from owners/directors may be requested to secure funding.

The circumstances by which a bad credit situation was arrived at, may be important to the approval process. Lenders may review the circumstances when assessing the application. Some may view certain circumstances with greater leniency and this may result in a better offer. Applicants are encouraged to be forthwith and provide detailed explanations when making a bad credit application.

Applications and requests for lending can be reported by lenders to Credit Reporting Agencies. The agencies maintain the credit histories of entities and individuals. Lenders review these credit reports when assessing applications. Where multiple requests for the same funding appear in a report, this may be viewed negatively by lenders as it may be seen as desperation.

Credit histories are held by Credit Reporting Agencies. These histories contain the history of credit held and applied for over a certain number of years. It shows the credit score and credit rating. Individuals and commercial enterprises can request a copy of their credit report through the relevant agencies. If errors appear on the report, there is a process in place to allow for fixing errors. This may improve the rating. Reducing debt levels may improve the financial position which may lead to a more favourable approach by lenders.

A bad credit score may need time to improve by displaying an ongoing record of good payments. Applicants may improve their prospects of being made a better offer by taking actions to improve their current financial position. This may include paying down current debt levels, both business and personal. It may include increasing income prospects by securing new or additional work. Reducing outgoings to improve the cash flow position may be considered.

When an application with a poor credit rating is approved for funding for a truck, the operator usually has their choice of product. The products include Chattel Mortgage, Truck Leasing, Commercial Hire Purchase and Rent to Own. The choice of product would be made by considering suitability of the features with the objectives and accounting issues of the operation.

All types of plant, machinery and equipment used across all industry sectors may be eligible for funding by all types of businesses including those with a poor rating for credit. Consideration of the asset – type, age, condition, etc, would typically form part of the application assessment process. Interest rates may vary on equipment based on the industry sector. Rates vary for new and used equipment.

Due to their structural nature of and the regulatory requirements, banks must adhere to certain guidelines when approving funding. When an operator with a poor credit rating is rejected for funding when applying directly to a bank, there are options available. There are non-bank lenders that will consider applications with a poor credit rating. Some of these do not work directly with customers but through selected finance brokers. Operators may consider engaging with a specialist finance broker to assist in sourcing quotes and offers.

Yes. When funding is secured based on a poor credit rating, the interest rate offered is typically higher than for good credit applicants. Additional conditions may apply. If over the initial period of the term the operator exhibits a good track record of meeting repayments, it may improve the credit rating. Refinancing to achieve a better interest rate and less strict conditions may be considered. Fees and charges will apply for ending the original arrangement early. These need to be considered in the overall cost-effectiveness of refinancing.