Bad Credit Business Car Loans
Whether you’re starting up work as a sole trader or have employees, a bad credit score doesn’t mean the end of your business car loan application.
Running a business is hard enough without being knocked back by your bank when you need a vehicle to keep things moving. According to the Reserve Bank of Australia (RBA), one in five Australian SMEs has experienced challenges when trying to obtain finance, with strict lender requirements being one of the most common roadblocks. If your personal or business credit history isn’t perfect, it might feel like finance is out of reach altogether.
The good news is that bad credit doesn’t have to stand between you and a car for your business. There are specialist lenders out there who can look past a less than perfect credit file, whether you’re a sole trader or running things through a company structure.
Can I get a business car loan with bad credit?
Yes, you can get a business car loan even if you or your business has bad credit. Specialist lenders are willing to look past credit scores, instead focusing on your overall financial picture, including how your business is currently trading and its ability to support repayments.
That said, your options and the rates and fees you’re offered may look a little different compared to a business with a clean credit file. Taking the time to shop around carefully, or working with a broker who knows the market, can make a real difference in finding a loan that suits your situation.
What types of vehicles can I buy with a bad credit business car loan?
You can take out a bad credit car loan to purchase a wide range of different commercial vehicle types, including:
- Passenger cars and sedans
- Utes
- Vans
- Light trucks
- 4WDs
Any vehicle you buy will need to meet your lender’s criteria related to its age, condition and nature of the vehicle. For example, some lenders will restrict you to vehicles no older than ten to 15 years of age by the end of your loan term, but we work with others who extend that to 20 years and beyond.
How much can I borrow for a bad credit business car loan?
You can take out a bad credit car loan for your business from as little as $5,000 up to as much as $250,000 with some lenders, though this will vary significantly depending on your personal and commercial profiles. The amount you’re ultimately approved for will come down to factors including:
- Your business’s turnover and overall financial position
- How long you’ve been trading
- The severity and recency of your bad credit
- Whether you can put down a deposit
- Whether the loan is secured against the vehicle itself
All applications are subject to lender assessment, so borrowing power will vary from business to business. Newer businesses or those with more serious credit issues are likely to find their borrowing power is more limited, while established businesses with strong financials will typically be able to borrow more for their car purchase.
What are my bad credit business car finance options?
There are a few different ways to finance a business vehicle, and the right fit depends on whether you want to own the car outright or simply use it.
Chattel mortgage
This is the standard business car loan option we’ve been talking about. With a chattel mortgage, you own the asset from the start of the finance term, while the lender uses the vehicle as security until the loan is repaid. You’ll pay it off with interest and fees over a term of up to five years in most cases, though some businesses may only be approved for loans a few months in length.
Finance lease
A finance lease is an arrangement where your business rents the vehicle from your leasing company for a period of one to five years. At the end of the term, you’ll have to pay the residual value, which you can do by buying the car outright, selling it, trading it in or refinancing it and extending your lease term.
Operating lease
An operating lease works pretty much the same way as a finance lease, but with one key exception: there’s no residual value to pay, so you simply return the car once the lease ends. This can suit businesses that prefer not to own their vehicle outright, or that like to upgrade regularly.
A broker can help you weigh up which structure best suits your bad credit profile, cash flow and tax position, as well as which providers are most likely to work with you.
Can sole traders get a bad credit business car loan?
Yes, business car loans are available to sole traders, too. Provided you’re able to satisfy your lender’s qualification criteria related to your time in business and turnover, as well as show that the loan payments are affordable for you, you can be approved for a commercial car loan with bad credit.
As an example, a self-employed applicant with bad credit may need to have had their ABN active for up to 12 months. However, if you have an extensive history working in the industry you’re operating in, you may only need six months.
As a sole trader, your personal financial conduct, including how you’ve managed any past defaults or credit issues, plays a more direct role in your approval. Specialist lenders are used to working with people in this position, so a less-than-perfect credit history won’t necessarily rule you out. Low doc car loans are also available for people in this boat.
Are bad credit business car loans tax-deductible?
Generally speaking, yes, there are tax benefits available on business car loans. Depending on how you use your vehicle, the following costs may be claimable as tax deductions:
- Interest charged on your business car loan
- Depreciation of the vehicle, up to the relevant car limit
- Establishment and ongoing fees charged by your lender
- GST included in the purchase price, up to the relevant limit ($6,353 as of the 2026-27 financial year)
If you use your vehicle for both business and private purposes, you can only claim a deduction for the business portion, so it’s important to keep accurate records to support your claim. For instance, a car you use 25% of the time for personal purposes will only be eligible for claims of up to 75%.
It’s worth speaking to your accountant to understand exactly what applies to your situation before making any assumptions about your tax position.
How to apply for a bad credit business car loan
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1
Fill out our online application form
Tell us about yourself and your current financial situation, as well as the loan you're after.
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2
Send through any necessary documents
We'll need to see documentation to verify your current finances and your identity.
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3
Have a chat to your broker
Your broker will give you a call and discuss your loan options.
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4
Lock in your chosen car
If you haven't already, we can help you find your car through our in-house car broker's national dealer network.
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5
Get your application submitted
Once you're happy to proceed, your broker will prepare your application for formal submission.
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6
Receive approval and settle your loan
You can be approved as soon as within one business day, after which we'll handle loan settlement.
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7
Drive away
Simply sign off and the car is yours!
Why Us?
Fast loan approval
We work hard behind the scenes to match you with a suitable lender and have your loan approved and funded in as few as 48 hours.
100% online
Where ever you are across Australia, you can apply for a bad credit car loan using your laptop or even a smartphone.
Trusted brand
For more than a decade, we've been helping borrowers with bad credit get approved for their car loans across Australia.
Car loan eligibility and documentation
Eligibility
- You must be 18 years of age or older
- You must be an Australian citizen, permanent resident or eligible visa holder
- You must be employed and earning a stable income that supports your car loan payments, which can start from as little as $480 per week
- Your chosen car must satisfy your lender’s vehicle eligibility criteria
Documentation
- A valid driver’s licence, front and back (passports can also be accepted)
- Your two most recent consecutive payslips
- 90 days of bank statements and/or Centrelink income statements
Frequently asked bad credit business car loan questions
Do I need an ABN to get a business car loan?
Yes, you'll need an active ABN to qualify for a business car loan, as lenders use this to confirm you're operating a genuine business. If you're a sole trader without an ABN, you may still be able to access a standard personal car loan instead, though the tax treatment and loan terms will differ.
Can a startup business get approved for a car loan?
Yes, businesses can be approved for loans with ABNs as recent as one day old. Startups with limited trading history will often find their options more restricted than established businesses, with loan terms and amounts typically capped at a lower amount.
Some lenders may require a deposit, additional security or a personal guarantee from a director to offset the lack of trading history, so it's worth speaking to a broker about which lenders are most likely to work with a newer business.
If I'm a discharged bankrupt, can I still apply for a car loan for my business?
Yes, discharged bankrupts can still apply for a car loan through their business. We work with lenders who offer solutions to discharged and even undischarged bankrupts, though all applications will be subject to your lender’s criteria.
Will a business car loan application affect my personal credit score?
It can, particularly if you're a sole trader or have provided a personal guarantee as a director, since your personal credit file may be checked as part of the application. Each application can leave a mark on your credit file, so it's important to avoid submitting multiple applications in quick succession.
Should I apply for an unsecured business loan to buy a car if I have bad credit?
An unsecured business loan may be a suitable option if the vehicle you’re buying is too old or in too poor a condition to be accepted as security by a lender. These loans are more flexible in how the funds can be used and are often quick to process. However, rates and fees are higher on unsecured loans to compensate for the lack of collateral. Speak to your finance broker about which option may be the best for your business.
Sources
- Small Business Economic and Financial Conditions – Reserve Bank of Australia
- Purchasing a motor vehicle – Australian Taxation Office