How to Get a £500K Business Loan in the UK (Bad Credit OK)

Getting a £500,000 business loan in the UK may seem impossible if you have bad credit, but it’s not. Lenders today look at more than just your credit score. In this guide, we’ll explain how to get a large business loan even if your credit history isn’t perfect and what steps you need to take to boost your chances.

Who Needs a £500K Business Loan?

A loan this size is typically used for:

• Expanding a business

• Buying property or equipment

• Hiring staff or investing in marketing

• Managing cash flow

• Buying stock in bulk

These loans are often taken by established businesses or fast-growing startups that need capital to scale.

Can You Get a £500,000 Loan With Bad Credit?

Yes, but it’s harder. Most banks will reject applications with poor credit. However, many alternative lenders and specialist finance companies offer large loans to people with bad credit — as long as your business can show strong income, assets, or growth potential.

What Lenders Look at (Besides Credit Score)

Even with bad credit, you can still qualify if you meet other key requirements. Lenders may look at:

• Your monthly/annual revenue

• Profit margins

• Time trading (1–2+ years is ideal)

• Collateral (property, vehicles, invoices, etc.)

• Business plan or future projections

They want to see if your business is making money now or has strong future potential.

Types of Loans You Can Apply For

Here are the main types of loans that can go up to £500K — even with bad credit:

1. Secured Business Loan

• You offer collateral (property, equipment, stock).

• Easier to get approved, even with poor credit.

• Lower interest rates.

• Risk: You could lose your asset if you don’t repay.

2. Unsecured Business Loan

• No collateral needed.

• Harder to get with bad credit.

• Higher interest rates.

• Based on business income and time trading.

3. Merchant Cash Advance

• You borrow money based on your card sales.

• Repayments are taken as a % of your daily income.

• Good for businesses like shops, salons, cafes.

4. Invoice Finance

• Get a loan based on your unpaid invoices.

• Lenders give you cash now and collect from your clients later.

5. Asset Finance

• Use equipment or vehicles you already own (or are buying) as security.

Best UK Lenders That Offer High Loans With Bad Credit

These companies are known to work with businesses that have poor credit:

Documents You’ll Need to Apply

Even with bad credit, if you have your paperwork ready, you’ll improve your chances.

• Bank statements (6–12 months)

• Business accounts (profit/loss report)

• Cash flow forecast

• List of assets

• Business plan (for unsecured loans)

• Proof of trading history

Tip: If you’re applying with bad credit, make sure to highlight your revenue growth, customer base, and any contracts you’ve secured.

Tips to Improve Your Chances of Approval

1. Offer Security (Collateral)
   If you can secure the loan with property, stock, or equipment, lenders are more likely to say yes.

2. Apply Through a Broker
   Finance brokers can match you with the right lenders — especially if your credit is low.

3. Show Strong Business Income
   Focus on showing steady or growing revenue. Even if your credit is bad, income matters more.

4. Fix Your Credit if Possible
   Even small improvements can increase your loan size and reduce interest rates.

5. Don’t Apply to Too Many Lenders at Once
   Multiple hard checks can hurt your credit even more. Be strategic.

Risks of Taking a £500K Loan With Bad Credit

• High Interest Rates – Some lenders charge more because you’re a higher risk.

• Personal Guarantees – You might be asked to sign a personal guarantee, which means you’re personally responsible if the business can’t pay.

• Hidden Fees – Always check for early repayment charges or admin fees.

Summary – Yes, You Can Get a £500K Loan (Even With Bad Credit)

Here’s a quick recap: