Can I Get a Business Overdraft With Bad Credit in Australia?

Written and reviewed by John Pierre Saliba, Director and Senior Finance Broker, MFAA Accredited. Last reviewed 17 September 2026.

Yes - you can get a business overdraft or business loan with bad credit in Australia. Non-bank lenders approve from Equifax 550, weighing your revenue more heavily than your credit history: ,000+ monthly turnover, 6 months of bank statements, no tax returns or property security under ,000, and decisions from 1 hour.

Bad credit is one of the most common concerns we hear from SME owners seeking business finance. The good news is that bad credit does not automatically disqualify you - especially when working with non-bank lenders through a specialist broker.

Here is the honest picture of what bad credit means for your business overdraft application in Australia.

What "Bad Credit" Actually Means to Lenders

Lenders use Equifax (formerly Veda) credit scores to assess credit history. Scores generally range from 0 to 1,200. Here is how lenders typically categorise them:

What Lenders Look at Beyond Your Credit Score

Non-bank lenders take a holistic view. A low credit score can be offset by:

• Strong consistent revenue - regular deposits in your business bank account signal a viable, cash-generating business
• Growing revenue trend - month-on-month growth is a powerful positive signal
• Long trading history - 2+ years in business significantly helps
• Managed ATO debt - a formal ATO payment plan is generally acceptable
• Clean bank account behaviour - no dishonoured payments in recent months
• Low existing debt - less existing obligations means more capacity to service a new facility

Common Credit Issues That Can Still Get Approved

• Managed ATO payment plan - approximately 60% of specialist broker approvals involve businesses with ATO debts
• Historical defaults that have since been paid
• Previous credit enquiries from shopping around
• A short credit history rather than a bad one
• Minor late payments on utilities or personal accounts

What Will Make Approval Harder

• Current unpaid defaults or judgements
• Bankruptcy within the last 5 years
• Part IX or Part X debt agreements
• Multiple recent dishonoured payments in your business account
• Significant undisclosed existing debt

How to Improve Your Chances With Bad Credit

1. Use a broker - they know which lenders will consider your profile before submitting any application
2. Clean up your bank account - avoid dishonoured payments for at least 3 months before applying
3. Formalise any ATO debt - a payment plan is far better than an unmanaged debt
4. Show revenue growth - apply during your strongest revenue period
5. Consider a smaller facility first - getting approved for $30,000 and repaying well builds your credit profile for a larger facility later

Related: Download the Business Overdraft Factsheet and Unsecured Business Overdraft Factsheet for rates, eligibility and worked examples.

For more on what lenders look at, read our guide on credit scores and business loans in Australia. Or use our borrowing calculator to estimate how much your business could access.

Business loans with bad credit

The same profile that qualifies for an overdraft with bad credit qualifies for a business loan - and for a one-off purchase, the fixed-term structure can be the better fit. Here's how the bad-credit business loan market actually tiers by lender type.

Banks want clean files. A bank decline does not mean you cannot get finance - it means that bank's credit policy does not suit your profile right now. Non-bank lenders weigh revenue more heavily than credit history: a business banking $40,000 a month with a 480 score will often be approved over a business banking $8,000 a month with a 620 score.

How much can you borrow with bad credit?

With a score between 500 and 600, most borrowers access between $10,000 and $150,000 unsecured; property owners can go higher. The key driver is monthly revenue, not the score alone. Worked example from our files: a plumbing business with 2 years trading, $25,000 a month revenue, Equifax 520 and one paid default was approved for a $75,000 revolving overdraft at 22% p.a. on drawn funds within 48 hours - no property security. Model your own numbers in the business overdraft calculator.

Rates and costs to expect

Bad credit borrowers should budget for 18% to 26% p.a. with non-bank lenders (against 14.55% to 25% p.a. for standard panel profiles), an establishment fee of 1-3% of the limit, and on overdrafts a line fee of 0.5-2% p.a. on the facility. Interest and fees for business purposes are generally tax deductible, and after 12 to 24 months of clean repayment history you can usually refinance to a lower rate.

Which product fits a bad-credit profile?

• Business overdraft / line of credit - the most commonly approved product for bad-credit situations. Revolving, interest only on drawn amounts, approved regularly from Equifax 550+.
• Unsecured business loan - fixed term, accessible from Equifax 550+. Better for a specific one-off purchase than ongoing cash flow.
• Secured business loan - property or asset security opens options at lower scores and lower rates, at the cost of putting assets on the line.
• Invoice finance - advances up to 80-90% of B2B invoice value, assessed on your clients' creditworthiness rather than your own score.

How to apply with bad credit

1. Check your Equifax score - free at getcreditscore.com.au.
2. Formalise any ATO debt - a payment plan before you apply. See ATO tax debt and business finance.
3. Download 6 months of bank statements as PDFs from your business account.
4. One application through a broker - we identify the lender most likely to approve your specific credit profile and submit once. One enquiry.
5. Decision from 1 hour.

Never apply to multiple lenders at once with bad credit - each enquiry damages an already-imperfect score and makes the next application harder.

Building credit after approval

Make every repayment on time, keep the drawn balance low, avoid new credit applications for at least 6 months, and keep ATO obligations current. A business starting at a 570 score with 12 months of consistent overdraft repayments will typically see 620-650+, opening significantly better options at the next review.