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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 4th December 2020*

Customers often ask us whether it’s possible to get a commercial mortgage with adverse credit, and the answer might surprise you. We have helped countless customers secured a business mortgage with credit issues on their files, from minor problems like a few late invoice payments to more severe adverse such as a bankruptcy or repossession.

Since we receive so many enquiries about bad credit business mortgages, we’ve put together this guide to them, and you’ll find the following topics covered below…

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Can I get a business mortgage with bad credit?

Yes, it’s possible to get a commercial mortgage with bad credit on your file, whether it’s yours or the business you’re applying through. Although your choice of lenders might be slimmer, the commercial market is vast and there are specialist lenders who take a flexible approach to borrowers with various kinds of adverse on their file.

The advisors we work with are whole-of-market and may be able to introduce you to a lender who is flexible enough to take the age and severity of your bad credit into account when deciding which rates you qualify for. Make an enquiry to speak with them today.

Can I get a business mortgage with a default on my file?

Although defaults are considered one of the more severe types of adverse credit, it can be possible to get a commercial mortgage with them on your file. It may be tough if your default was in the last 12 months, but beyond that, specialist lenders might be able to help.

The important thing to remember is that the older the issue, the easier it will be for a specialist bad credit lender to overlook when deciding which rates you qualify for. The advisors we work with can also suggest ways you can offset the risk your bad credit creates – see the ‘How to get a commercial mortgage with bad credit’ section for more on this.

Can I get a commercial mortgage if I’ve had a repossession?

Repossessions are typically considered one of the most severe forms of credit issue, but with a specialist lender on your side, it may be possible to get a commercial mortgage with one on your file, depending on how long ago it was and a number of other factors.

While you might struggle to find a mortgage lender within 12 months of the repossession of a commercial property you owned, with the help of a whole-of-market broker it may be possible to track down a business lender offering favourable rates to individuals and businesses with a repossession against their name, under the right circumstances.

What about if I have a poor credit score?

Yes! Keep in mind that there are commercial mortgage lenders who pay no attention to credit ‘scores’. These providers simply check your file for the presence of adverse (rather than assign a numerical figure to your borrowing history), and even then, credit issues won’t necessarily be a deal-breaker.

As previously mentioned, commercial mortgage lenders have the flexibility to take the cause, severity and age of any credit problems you have into account.

How to get a business mortgage with bad credit

Bad credit mortgage providers in the commercial space often have the flexibility to take the age and severity of your credit issues into account, but there are other factors that will affect their lending decision, such as how closely you meet their other eligibility criteria.

There are also ways you can offset the risk posed by your adverse credit, such as putting down extra deposit or security or offering a personal guarantee from company directors.

What else will affect the provider’s lending decision, besides my credit report?

Having bad credit on your file can drive up the level of risk in the eyes of some mortgage providers, so it’s important that you convince the lender your application is strong in other respects. All commercial mortgage applications are assessed on a case-by-case basis, but lenders tend to reserve their most favourable rates for borrowers with the following…


Most commercial lenders determine whether a borrower can afford the loan by assessing their profitability. They will specifically be interested in earnings before interest, tax, depreciation and amortisation (EBITDA). While there’s no specific amount of operating profit you’ll need to be making, the more confident the lender will be that your EBITDA figures are sufficient to cover the mortgage payments, the more likely they are to offer favourable rates despite your bad credit.


Commercial mortgages usually require a deposit of between 20-40% depending on the level of risk. If you have bad credit against your name, the lender may request you put down a percentage towards the higher end of that scale, but if you’re in a position to put down more, you might end up with more favourable rates. Putting up additional security, such as another property or an asset you own and hold equity in, can also help minimise the level of risk.

Industry experience

There are lenders who specialise in mortgages for start-ups and first-time investors, but generally speaking, a strong track record in the relevant industry will help convince the lender that the investment is viable.

A strong business plan

Some lenders may request to see a business plan before they rubber-stamp a commercial mortgage deal. The more convinced they are that yours is viable, the better the chances of them overlooking your adverse credit.

A broker can find mortgage lenders who work with bad credit

The important thing to remember about applying for a commercial mortgage with bad credit is that your choice of lenders will be fewer than for a borrower who has a clean credit report.

With this in mind, it’s important to seek advice from a whole-of-market broker to give you the best chance of finding the lender offering the best deals you qualify for.

Approaching lenders individually is not recommended as making too many applications can damage your credit report even further, and online rates tables are not always reliable since they often give the most prominent placement to sponsored products.

For these reasons and more, your best bet is to make an enquiry and speak to the advisors we work with. They can offer you bespoke business mortgage advice and introduce you to the lender best positioned to offer favourable rates to a borrower with your circumstances.

What is a non-status commercial mortgage lender?

Non-status commercial mortgage lenders are considered a last-resort option for borrowers who lack the necessary historical financial information that mainstream providers need for their eligibility checks, although are now few and far between following a clampdown by the Financial Conduct Authority (FCA). Some cater to customers with severe adverse, but usually insist on higher interest rates and capped loan to value (LTV) ratio deals.

The advisors we work would aim to find a reputable commercial lender whose eligibility requirements you meet, before considering possible alternatives.

Speak to an expert on business mortgages for bad credit customers

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry online.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 4th December 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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