Commercial Bad Credit Loan

Commercial bad credit loans and bad credit business loans exist within a number of financial institutions in Australia. Therefore if you have bad credit and want to buy or refinance your commercial or industrial property, it is still possible to get your loan approved.

How many lenders offer bad credit commercial loans?

There are only a handful of commercial bad credit lenders or financial institutions. There are also quite a few private money lenders who lend on commercial property if someone has bad credit. The lenders who lend using commercial, industrial or retail property as security with bad credit are usually specialist mortgage lenders and not banks. These lenders in many respects are also non conforming lenders.

What is required to get a commercial bad credit loan approved?

The primary requirement for receiving a commercial bad credit loan is adequate security. Further a lender will be looking for adequate affordability or serviceability for the loan. Depending on the lender, they could also ask for an explanation of the bad credit history. An example of bad credit can also be defined as having any of the following:

  1. Paid and unpaid default
  2. Arrears or late payments
  3. Judgement
  4. Writ
  5. Part 9
  6. Part 10
  7. Bankruptcy
  8. Administration

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Can I get a commercial bad credit loan using a low doc policy?

Yes, it is possible to get a commercial bad credit loan using a low doc loan policy for approval. This can be found with a handful of lenders.

What will I need to provide?

This varies from lender to lender however you may be asked to provide one or more of the following:

  • A declaration of affordability statement to be signed by the borrower.
  • 6 months business trading statements.
  • Business Activity Statements or BAS.

This will come in the form of a template that the lender will provide at the time of application. In some instances, the declaration of affordability letter may need to be co-signed by the applicant’s accountant.

To verify the applicant is at least doing some type of turnover to justify him making an income declaration.

Nonetheless, there are a few different low doc loan options in this instance, hence there are different lenders to choose from.

Can I get a bad credit commercial loan using a no doc policy?

Yes, a commercial bad credit loan is possible using No Doc policy. The commercial no doc loan policy can only be found with a very small number of lenders. Using this option, you do NOT need to make an income declaration or supply any type of business trading or activity statements. Hence a commercial bad credit loan under No Doc policy is also considered an asset lend. This type of loan is slightly more expensive than a low doc loan, but it is more flexible.

Other Commercial Loan Types

Commercial bad credit FAQ

Yes, commercial bad credit loans can be more expensive depending on:

  • Level of bad credit, and
  • LVR

Further, if the loan was to come under a commercial low doc loan or commercial no doc loan policy, this could also make the loan slightly more expensive than usual. The higher the risk rating of the borrower, the more expensive the interest rate that would apply.

The maximum LVR for a commercial bad credit loan is dependent on the lender. Generally, you could borrow to a maximum of 75% LVR using commercial, industrial or retail property as security with bad credit.

Some lenders who lend on commercial property with bad credit will lend giving up to 30 year loan terms. This comes as a surprise to some borrowers especially when the borrower is not subject to any ongoing review like mainstream commercial mortgages as can be found within some major banks.

There are some other lenders who will lend on 1-3 year loan terms only. Depending on what lenders take up the transaction or the borrower likes or fits into, will predicate the loan term.

The lenders who lend for commercial bad credit loans allow various name types to borrow. These can differ from lender to lender as some are accepted by one and not accepted by another. These include:

  1. Personal name
  2. Company name
  3. Trust
  4. Partnership name
  5. Business name
  6. Super fund name

There are a few different types of properties that can be used for a commercial bad credit loan or mortgage. these include the following:

  1. Commercial property
  2. Industrial property
  3. Retail property
  4. Residential property
  5. Rural property
  6. Special zoning property
  7. Special use property

At Mortgage Providers we have access to all the lenders who offer bad credit commercial loans. Further, we know which lenders offer the most flexible product and terms coupled with the cheapest interest rates and fees.