Can I get a commercial loan with a bad credit history?

Share your concerns & ideas about commercial property loans in Australia.
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Mrs Robbins
Posts: 40
Joined: Fri Jul 19, 2013 2:25 am

Can I get a commercial loan with a bad credit history?

Post by Mrs Robbins »

Hi there,

I want to invest in a commercial property. I will need to borrow around $1.5 million for the purchase. I am in a strong financial position these days and have sufficient income to make the repayments on the loan. However, my credit history is far from perfect. I am afraid that my financial difficulties from the past will come to haunt me.

So I would be grateful if anyone could provide me some tips for my situation. Will it be possible for me to get a commercial loan with bad credit?

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Otto Dargan
Mortgage Specialist
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Can I get a commercial loan with a bad credit history?

Post by Otto Dargan »

Hi and welcome to the forums Mrs Robbins.

It may be possible for you to get a commercial loan with bad credit. Although this type of loan may not be approved by standard lenders, there are specialist lenders who focus on bad credit commercial loan. They may be willing to look past the black marks on your credit file and focus on the merits that you may have as a borrower.

There are several features of a bad credit commercial loan. Some of those are:
  • You may be able to borrow up to 75% of the purchase price of the commercial property, or 70% if you are refinancing.
  • It is possible for you to borrow up to $10 million, or $5 million if you are refinancing.
  • Lenders may be willing to consider bad credit history and arrears.
  • You may be able to get a loan with reduced income evidence.
  • Loans for purchases, investment, and business are all considered.
  • Lenders may accept equity releases, refinancing tax debt, and debt consolidation.
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Mrs Robbins
Posts: 40
Joined: Fri Jul 19, 2013 2:25 am

Re: Can I get a commercial loan with a bad credit history?

Post by Mrs Robbins »

Thank you for the information. Is it possible for me to increase my credit score?

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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Can I get a commercial loan with a bad credit history?

Post by Otto Dargan »

Hi Mrs Robbins,

It may be possible for you to repair your credit. Credit repair is the process of improving your credit by removing disputable and unfair listings from your credit report. There are several benefits of improving your credit rating such as:
  • You will get a lower interest rate on your loans.
  • The chances of your loan being approved is higher.
  • You will pay less in repayments.
  • The upfront and ongoing charges will be less.
You may take the following steps in order to increase your credit score:
  • Avoid overdrawing your cheque account.
  • Do not go over your credit card limits.
  • Pay off your credit card debt as much as possible.
  • Pay all your debts on time.
  • Pay any defaults on your credit file and wait for them to be removed.
  • Don’t apply for loans that you don’t need.
  • Stay in your current address and job.
  • Save as much as you can in your savings account.
  • If you have decided on the lender with whom you will apply for a mortgage then apply for a credit card with them and make timely repayments.
Even if you have defaults on your credit file, you can take the following steps to increase the chances of your loan being approved:
  • Provide a default explanation letter.
  • Provide evidence to back up your explanation.
  • Have at least 5% of the purchase price in genuine savings.
  • Pay any unpaid defaults and have them marked as paid.
  • Apply with a lender that may accept borrowers with defaults.
If you would like to know more about these then you can check out our website. We can also be reached on 1300 889 743 or you can fill in our free assessment form to see if you qualify for a loan or not.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Mrs Robbins
Posts: 40
Joined: Fri Jul 19, 2013 2:25 am

Re: Can I get a commercial loan with a bad credit history?

Post by Mrs Robbins »

Hi Otto,

Thanks for the information. Your website does seem like a good source of information. I will contact you again if I have any more confusions.

aurora
Posts: 52
Joined: Mon Jul 15, 2013 1:06 pm

Re: Can I get a commercial loan with a bad credit history?

Post by aurora »

Hi everyone,

I am not sure about my credit score. Why is it so important?

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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Can I get a commercial loan with a bad credit history?

Post by Otto Dargan »

Hi aurora,

Different lenders use different methods to calculate your credit score. They have their own algorithms through which they calculate your credit score. Your credit history, however, is the same for all lenders. Your credit history is recorded in your credit file by credit reporting agencies such as Veda Advantage.

Your credit history is one of the components that lenders use to calculate your credit score. In addition to your personal details, your credit file contains the following information:
  • Records of your debt repayment history.
  • Any company directorships that you might have held.
  • Loans that you have applied for, also known as enquiries.
  • Loans or accounts where you have been overdue for more than 60 days, or defaults.
  • Court judgments.
  • Court writs.
  • Bankruptcy and Part IX history.
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

aurora
Posts: 52
Joined: Mon Jul 15, 2013 1:06 pm

Re: Can I get a commercial loan with a bad credit history?

Post by aurora »

Thank you for your time, Otto. Your reply was really helpful to me.

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