How to get funding with poor credit

Poor credit can be identified by a low credit score, previous/ outstanding CCJ’s and previous defaults/ missed payments. All these can make it much harder to get funding as it shows a low credit worthiness for the business. Lenders will take both the business’ credit worthiness and the Director’s personal credit into account.

What is a CCJ?

A CCJ is a County Court Judgment that has been issued because you have been unable to pay a supplier, lender or creditor money that you owe them. The court has formally declared that you must pay back the relevant body the money owed, usually by an agreed date.

A CCJ will show on your credit profile for up to 6 years unless you pay the funds back within 30 days. As a result, we receive a lot of urgent requests to get some quick funding to help pay back CCJ’s. However, it’s worth noting that no lenders will fund a CCJ directly.

If you have a CCJ/ poor credit, it does make getting finance difficult however there are a few factors that determine how difficult it will be and some finance options which you can get regardless.

Unsecured business loan options with poor credit

Most unsecured loan lenders will require you to satisfy the CCJ before offering you a loan, though if it’s for a small amount (less than £500) and/ or if there is a viable story behind it, then they may still be able to consider your application.

Factors taken into consideration:

• Amount – how much was the CCJ for? Some lenders will look pass outstanding minor CCJ’s up to around £500. However, even if the CCJ’s are satisfied, they may still not be able to lend if the CCJ was for a higher amount.
• When? – if the CCJ was years ago then the lender will want to understand why it hasn’t been settled.
• Story – what happened? Why did you get issued a CCJ? If you can provide a story or background information about the CCJ, then this will help certain lenders to look to still make you an offer.

If your credit score is simply too low, then we have unsecured lenders who will accept a lower credit score but their lending will be at a higher interest rate. This is still worthwhile as by taking out a business loan, making repayments on time and paying it off successfully, you will build and improve your credit score allowing you to get cheaper funding next time around.

We will be able to determine on an initial call the options available to you and can source funding for you even if you have poor credit.

Secured funding options with a CCJ

Secured loans are unaffected by poor credit and CCJ’s as their risk is much lower due to the assets/ property involved. If you have property available, then we can you a secured loan against the property regardless of your credit score or any CCJ’s of any size. Please refer to this article on our bridging loans.

To get a loan, you ideally want to settle the CCJ and provide a sufficient explanation of why you got the CCJ and the steps you’ve since taken to ensure it doesn’t happen again (if applicable).

Do get in touch with us if you have a CCJ as we will be able to let you know the options available to you.