Credit history

Business loans with bad credit

HomeSec considers credit history and does not treat it as disqualifying on its own. There is no score threshold, because every application is read by a Lending Manager rather than filtered by a system. Lending is secured against equity in real property and assessed on the business purpose and the exit, from $20,000 to $5,000,000, settling in as little as 24 hours.

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A person decides every loan

Every application is read by a Lending Manager and every credit decision is signed off by a person. We do not use artificial intelligence to assess, approve, decline or price a loan. That is the whole difference when your credit file is not clean. A score threshold closes a file automatically; a person can read what the file actually says. An algorithm cannot see why the last two years look the way they do. A person can, and that is the whole reason files we write are ones a scorecard would have rejected.

What is actually on your credit report, and for how long

Most people carrying "bad credit" have never seen the file and are worrying about the wrong entry. The retention periods are set by the Privacy Act, not by the lender who listed it:

Credit enquiry: 5 years
Payment default: 5 years
Court judgment: 5 years
Serious credit infringement: 7 years
Repayment history (consumer): 2 years
Bankruptcy: 5 years from the date, or 2 years from discharge — whichever ends later.

Two things follow from that table. A paid default still sits there for the full five years, marked as paid — so paying it does not clear your file, though it does change how it reads. And every application you make leaves an enquiry for five years, which is why applying widely after a decline does more damage than the original problem.

A default has to clear a threshold before it can be listed

Not every unpaid invoice can become a default. For consumer credit the amount must be at least $150 and at least 60 days overdue, and the provider must have sent you two separate written notices — one telling you the payment is overdue, and a second saying the debt is about to be listed. For commercial credit the minimum is $100, with notice of the intention to list.

If a default was listed without those steps, it may be listed incorrectly, and you can ask the credit reporting body to correct it. That is free, and it is worth doing before you assume the file is what it appears to be.

Check the file before you do anything else

You are entitled to a free copy of your credit report. Australia now has two credit reporting bodies — Equifax and Experian, the latter holding the business formerly operated by illion. Get both. People routinely find a default they have already paid, a judgment belonging to someone with a similar name, or an entry that should have expired two years ago. Correction costs nothing but a letter.

What adverse credit changes here, and what it does not

It does not stop the loan. What it can do is affect pricing, because pricing is risk-based, and it can affect how much weight we put on the exit. A file with defaults and a dated, documented exit is straightforward. A file with defaults and a vague exit is the one we ask more questions about — and the questions are about the exit, not the defaults.

Defaults and arrears. Common on files we write. Considered, not disqualifying.
Judgments and writs. Same, though we will want to know whether the underlying debt is resolved, because an unresolved judgment can end up competing with our security.
An ATO balance. Frequently the reason for the loan. See ATO and tax debt funding.
Bankruptcy or a prior insolvency. Not an automatic no. It does change what security is available and who can grant it, so raise it on the first call rather than at settlement.
No credit history at all. A new entity with no file is not a problem. It is a problem for a scorecard, which is a different thing.

What each event on a credit file changes here

On the file	How long, and what it means	What it changes at HomeSec
A paid default	Stays five years from listing. Shows you had a problem and resolved it.	Generally no problem for us. Often the reason you are here.
An unpaid default	Five years. The creditor may still be pursuing it.	Generally no problem for us. If it is on the security property, it is dealt with at settlement.
A court judgment	Five years. A creditor has been to court.	Generally no problem for us. A judgment creditor can register on the title, so we check the title first.
A payment default on a loan	Reported under comprehensive credit reporting for two years.	Not the deciding factor. The property and the exit are.
An ATO debt	Not on your credit file unless the ATO reports it — which it can, for business debts over $100,000 more than 90 days overdue.	The most common reason for a file here. Paid direct from settlement.
A discharged bankruptcy	Two years from discharge, or five from the date, whichever is later.	History. Assessed on the property and the exit like any other file.
An undischarged bankruptcy	Property vests in the trustee for the duration.	The trustee's position on the property decides it, not ours. Call — some are workable.

Retention periods as generally published by Australian credit reporting bodies; general information, not legal advice. Bankruptcy is a matter for a registered trustee.

How much you can borrow with bad credit

The same as anyone. The ceiling is set by the property — 80% of a residential property's value, 70% of a commercial one, less what is already owing — not by the credit file.

Worked positions

Security and file	Value	Existing loan	Ceiling	Available
Residential, defaults on file	$780,000	$410,000	80% — $624,000	$214,000
Residential, ATO debt unreported	$1,050,000	$520,000	80% — $840,000	$320,000
Commercial, judgment on file	$1,600,000	$700,000	70% — $1,120,000	$420,000
Home owned outright, discharged bankrupt	$900,000	—	80% — $720,000	$720,000

Indicative only. Value is our own assessment of the security.

Bad credit business loan, bad credit commercial loan — one loan, whatever it is called

Whether you call it a bad credit business loan, a bad credit commercial loan, a business loan with defaults or credit-impaired business finance, you are describing your file, not a different product. What we lend is a business loan secured by property, and it is the same loan whether the security is a home or a factory and whether the file is clean or not. Commercial security is assessed to 70%; the credit file is considered the same way for both.

From the call to the money

Tell us the deal

Amount, purpose, timing, the property and how the loan gets repaid. A Lending Manager gives you an indicative answer on that call — usually in minutes.

Minutes

Conditional approval

Photo ID, a rates notice and your most recent mortgage statement. That is the whole list, and it takes about fifteen minutes.

About 15 minutes

Funds released

As little as 24 hours from a clean, complete scenario. Paid where you tell us — to your account, or straight to the ATO.

As little as 24 hours

What it costs

Priced per file, on the property, the position, the amount and the exit. No rate is published, because a rate with "from" in front of it is the best file's number. How it is priced, and every fee that exists.

✓Upfront: a small commitment fee, payable only once your loan is conditionally approved

✓Valuation fee: none — we don't use valuers

✓Monthly or line fees: none — no monthly, line or account-keeping fees

✓Fee to extend: none — no rollover fees, legal fees or rewriting the loan to extend

Why the security matters more than the score

An unsecured lender has nothing but your conduct to price against, so conduct is everything and a score threshold is a rational way to run that book. We lend against registered security over real property. If the equity is there, the purpose is a business purpose and the exit is credible, the credit file is context rather than the decision.

That is also why we can say yes on files that were declined in eleven seconds somewhere else. It is not that we are braver. It is that we are looking at a different thing.

One thing to be careful of

"Credit repair" services that charge a fee to remove correct listings. A listing that is accurate and properly made generally cannot be removed, and paying someone to try is money spent on a decline that has already happened. Correcting an incorrect listing is free and you can do it yourself with the credit reporting body.

Questions we get on the phone

Can I get a business loan with bad credit in Australia?

Yes, where there is equity in real property to secure it. HomeSec applies no credit score threshold — every application is read by a Lending Manager. Defaults, judgments, arrears and an ATO balance are all common on files we write.

How long does a default stay on my credit file?

Five years, whether or not it is paid. A paid default is marked as paid, which reads better, but it does not come off early. A serious credit infringement stays seven years.

Will applying to you damage my credit file further?

Credit information may be obtained during a formal application, with your consent, and that leaves an enquiry. It is a reason to have one proper conversation rather than to apply in several places at once.

Do you have a minimum credit score?

No. There is no threshold, no scorecard and no automated filter. That is a deliberate difference, and it is stated in our privacy statement as well as here.

I am an undischarged bankrupt. Is that the end of it?

Not automatically, but it changes what security is available and who is able to grant it. Raise it on the first call so we can tell you quickly rather than at settlement.

Can I get a commercial loan with bad credit?

Yes — a bad credit commercial loan is the same file as a bad credit business loan here, because the security is what carries it. Commercial property is assessed to 70% LVR, residential to 80%, and the credit file is considered in the same way for both: never disqualifying on its own.

How much can I borrow with bad credit?

The same as anyone: up to 80% of a residential property's value or 70% of a commercial one, less what is owing, between $20,000 to $5,000,000. Adverse credit does not reduce the ceiling, because the ceiling is set by the property.

Does a bad credit loan cost more?

Private lending is priced per file, on the property, the position, the amount and the exit. A default on the file is not a pricing line on its own. What moves the price is the security and the exit; what a clean file gets is what a clean security and a clean exit get.

Can I get a business loan after bankruptcy?

After discharge, yes, assessed on the property and the exit like any other file. During an undischarged bankruptcy the property vests in the trustee, and the trustee's position — not ours — decides whether security can be given. Some are workable; call and we will say.

Will applying hurt my credit file further?

Not for an indicative answer — we can tell you on the phone whether the deal works from the property, the equity and the exit. A credit file is accessed later, with your consent, as part of formal approval, and a single enquiry from a secured business lender is not what a bad file is made of.

Related situations

Credit history is rarely the only thing in the way. These are the others.

Declined somewhere else No financials or returns Caveat loans

Talk to a Lending Manager

Describe the file in your own words. Nothing on it disqualifies you by itself. 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.

Sixty seconds, no documents

See if you qualify in sixty seconds

Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.

That's the HomeSec Advantage.

See if you qualify Call 1300 93 83 87Mon–Fri, 8:30am – 5:30pm Melbourne time

Reviewed by Jason Brockmuller, Joint Chief Executive