Yes. An Equifax score of 550 or above qualifies with most non-bank lenders on the OverdraftMe panel. Some specialist lenders will consider scores below 500 on a case-by-case basis, so bad credit does not automatically mean no finance.
What Counts as Bad Credit for Business Lending?
In Australia, your Equifax score ranges from 0 to 1,200. Banks consider anything below 600 as "bad credit." Non-bank lenders are more flexible. Here is how the score bands break down for business lending purposes.
- 0-399: Very poor. Most lenders will decline. Specialist options may exist with strong revenue.
- 400-549: Below average. Non-bank lenders will consider you, but expect higher rates and lower limits.
- 550-649: Fair. Most non-bank lenders on the OverdraftMe panel will approve at standard non-bank rates.
- 650-799: Good. You qualify with both banks and non-banks. Better pricing available.
- 800+: Excellent. Best rates and highest limits.
Bad credit is not just about the score number. Lenders also look at defaults, court judgements, dishonour history, and how recently the issues occurred. A paid default from 3 years ago is viewed very differently to an unpaid default from last month.
Key point: A single late payment 2 years ago is not the same as an active default. Non-bank lenders focus on your current trading performance, not just historical credit events.
Minimum Credit Scores by Lender Type
Credit score requirements at a glance
Banks want clean files. If you have been declined by your bank, that does not mean you cannot get finance. It means the bank's credit policy does not suit your profile right now. Non-bank lenders use different criteria and weigh revenue more heavily than credit history.
| Lender Type | Min. Score | Max Amount | Typical Rate |
|---|---|---|---|
| Big 4 Bank | 650+ | $500K+ | 8-14% p.a. |
| Second-tier Bank | 600+ | $250K | 10-16% p.a. |
| Non-bank (standard) | 550+ | $500K | 14-22% p.a. |
| Non-bank (specialist) | 400+ | $150K | 18-26% p.a. |
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. If you own property, limits go higher. The key driver is your monthly revenue, not just your score.
Worked Example: $75,000 Business Overdraft at Equifax 520
Profile: Plumbing business, 2 years trading, $25,000/month revenue, Equifax 520, one paid default ($2,400) from 18 months ago.
Facility: $75,000 revolving overdraft, 22% p.a. interest on drawn funds.
Cost if $50K drawn: $50,000 x 22% / 365 = $30.14/day or $211/week in interest.
Fees: $1,500 establishment fee, $750/year line fee on the $75K limit.
Result: Approved within 48 hours. No property security required.
Revenue is king. A business doing $40,000/month with a 480 credit score will often get approved over a business doing $8,000/month with a 620 score. Lenders want to see that you can service the facility from cash flow.
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Check your options →What Rates and Costs Should You Expect?
Bad credit borrowers should budget for rates between 18% and 26% p.a. with non-bank lenders. That is higher than bank rates, but the trade-off is access to finance that banks will not provide.
- Interest rate: 18-26% p.a. on drawn funds (varies by score, revenue, and facility size)
- Establishment fee: 1-3% of the facility limit, paid upfront or capitalised
- Line fee: 0.5-2% p.a. on the total facility limit (applies to overdrafts)
- Monthly account fee: $0-$30/month depending on the lender
The good news: these costs are tax deductible as business expenses. And as your credit score improves over 12-24 months of clean repayment history, you can refinance to a lower rate.
How to Improve Your Chances of Approval
If your credit is not perfect, there are practical steps you can take right now to improve your approval odds.
- Clean up your bank statements. No gambling transactions, no dishonours, no overdrawn days. Lenders review the last 90 days closely.
- Pay off small defaults. Clearing defaults under $1,000 can shift your score 30-50 points within 30 days.
- Set up an ATO payment plan. If you have tax debt, a formal ATO payment plan shows lenders you are managing it.
- Use a broker. One application through OverdraftMe goes to the right lender for your profile. Multiple direct applications create multiple enquiries, which drops your score further.
- Show revenue growth. If your last 3 months are stronger than the 3 before that, it works in your favour.
- Separate business and personal accounts. Mixed accounts make it harder for lenders to assess your business revenue.
Broker advantage: We submit one soft enquiry across our panel of 50+ lenders. That protects your score. Going direct to 5 lenders creates 5 hard enquiries and can drop your score by 50+ points.
Frequently Asked Questions
Most non-bank lenders require a minimum Equifax score of 550. Banks typically want 650+. Some specialist lenders on the OverdraftMe panel will consider scores below 500 on a case-by-case basis, but expect higher rates and lower limits.
A single enquiry through a broker like OverdraftMe is a soft pull that does not affect your score. Making repayments on time will actually improve your score over 12-24 months.
Typically 18-26% p.a. for borrowers with Equifax scores between 400-600. Rates improve as your score improves. A borrower at 550 will usually get better pricing than a borrower at 450.
Yes, if the default is paid and more than 12 months old. Unpaid defaults under $500 are sometimes overlooked. Unpaid defaults over $10,000 make approval harder but not impossible with the right lender.
Show strong monthly revenue ($10,000+), keep your business bank account clean for 90 days, pay off small defaults, set up ATO payment plans, and apply through a broker who knows which lenders suit your profile.
General information only. Not financial advice. Credit subject to lender assessment. All rates, fees and terms quoted are indicative only and subject to change based on your individual circumstances, credit profile and lender policy. OverdraftMe is a credit representative of Lend & Loan Pty Ltd (ACL 511092).
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