How to Get a Loan for Business from Westpac with Bad Credit Score?

Are you an aspiring entrepreneur embarking to start up a new business, but hampered by poor credit scoring? Or do you need additional cash flow for an existing business, however, inconsistency revenue affects your credit score? According to FICO, if your credit score falls between 300 and 629, then you are deemed to have bad credit. Having a red mark on your credit score report makes applying for a business loan an arduous task. This is because the lenders will bear a higher risk of loan default. Do not be dejected by these initial setbacks. Read on to discover how to get a business loan from Westpac, even if your credit score is bad.

How to get a business loan from Westpac with a bad credit score?

Borrowing money to purchase equipment or managing your company’s cash flow is possible even with a spotty credit history. In order to borrow money with a bad credit score, you will need to clean up your credit score. The only way to achieve that is by paying your debts promptly for the next 12 consecutive months. In the business setting, time waits for no man. Getting a quick business loan approved is imperative to grow your business or seize golden opportunities. As Australia’s first and oldest bank, Westpac offers some of the best business loans for applicants with bad credit.

Firstly, let’s review the factors that affect your credit score rating. Subsequently, let us evaluate how to get a business loan from Westpac even with a bad credit score.

1. Bill Payment History 

With 35% of your credit score determined by your payment history, clearing your debts promptly lends to a good credit score. As such, paying before your due date and avoiding all serious payment issues will earn you a clean credit score. Moreover, you should avoid the following payment issues to maintain a clean credit record.

  • Charge-off
  • Collections
  • Repossessions
  • Bankruptcy
  • Tax Liens
  • Foreclosure

2. Manage Debt Levels To Secure Loan with Bad Credit

Did you know that debt ratio affects 30% of your credit score? Debt ratio is measured as a sum of the unpaid outstanding balance on your credit card against your credit limit. Debt ratio is alternatively known as credit utilization. The guiding principle is the lower your debt ratio, the better your credit scoring. The good news is that you can swiftly improve your credit score by paying down your outstanding debt.

3. Credit History Age

Do you recall when you established your first credit account? The age of your credit history determines 15% of your credit score. The credit history age considers the age of your oldest account and the average age of all of your accounts. An older vintage improves your credit score as it shows that you have years of experience handling credit. If you tend to open and close new accounts frequently,  you will be assigned a lower average credit age.

4. Types of Credit on Your Report

There are two types of credit accounts that exist, revolving accounts and installment loans. You can improve your credit score by having both types of accounts. What this suggests is that you have experience managing various types of credit.

You can up your credit score ante by having loans for different credit types. Examples of different credit types include:-

  • Car loan
  • Home loan
  • Credit card
  • Installment loan
  • Student loan
  • Personal loan

Contrastingly, types of credit comprise only 10 percent of your credit score. So not having a certain credit type will not devastate your score.

5. Number of Credit Inquiries

Every time you submit an application that requires a credit check, it marks an inquiry on your credit report. This indicates that you have made a credit-based application. As inquiries only contribute 10% of your credit score, one or two inquiries will not hurt. However, if you make multiple inquiries over a short period, this can dampen your FICO score. To preserve a clean credit score, keep your credit applications to a minimum.

Negative records on your credit scores stay for long periods of up to seven years. Nevertheless, there are methods to get a business loan despite a far from perfect credit history. Read on to discover 5 tips and alternatives on how to get your business loan approved from Westpac, despite bad credit history.

1.Ensure Your Credit Profile Is Accurate

The first step to ensuring easy approval of your business loan application is to ensure the accuracy of your credit profile. You may have missed settling your credit card bill during hectic traveling periods. With several missed credit card payments, your credit card records will reflect the default in payment. This affects your credit score and results in higher loan interest. Noting this, check that your credit score reported by business credit bureaus (like Equifax, Experian, and Dunn & Bradstreet) is error-free.

With an accurate profile, Westpac will be able to analyze your business credit accounts and minimize the risk of loan application rejection. Should you find any mistake on your business credit record, send a dispute letter to the credit bureaus so they can rectify the error. Instilling discipline to correct your credit profile will help you secure your business loan from Westpac even with bad credit.

2. Apply For Microfinancing 

If you need to get your small business off the ground or expand your startup, then applying for microfinancing from Westpac is an option. Microcredit or sometimes referred to as microfinancing extends small loans to borrowers who are cash-strap. These borrowers typically lack collateral, do not have steady employment and no valid credit history. A classic profile of a microcredit borrower is an entrepreneur who does not qualify for a business loan.

Through Westpac’s exclusive partnership with Many Rivers Microfinance, fledgling entrepreneurs with a strong, community business purpose can submit business proposals for microfinancing. What’s great about Westpac’s mini loans is that genuine entrepreneurs will not only receive financial help from Many Rivers. Over and above, entrepreneurs will receive guidance on how to write a robust business proposal, manage their advertising and promotional campaigns. They will also receive financial literacy training and other business support required to grow a small business.

As a leading Community Development Financial Institution, the Federal Government provides 48% of Many Rivers funding. 39% from corporate partnerships and the balance 13% from philanthropic donors and foundations.

Over time, the Westpac – Many Rivers Microfinance alliance helps individuals who face financial exclusion build a robust credit history with reputable banks like Westpac Bank.  The Many Rivers Microfinance loan is available in 13 locations across New South Wales, Queensland, and Western Australia. In addition, Many Rivers Microfinance offers microloans of up to $5,000.

3. Leverage On Personal Loans For Business Use

Did you know that you can apply for personal loans for business?  In such circumstance, your credit record as an individual plays a humungous role in obtaining the personal loan. Unlike a business loan, one of the distinct advantages of applying for a personal loan for business use is that you need not have collateral to back the loan. In addition, you can apply for a personal loan ranging from between $4000 and $50,000, and enjoy the flexibility of selecting your preferred repayment frequency. You can choose to pay weekly, fortnightly or monthly.

When your business cash flow improves, you can make extra repayments to pay down your loan sooner. In addition, within 60 minutes of the final approval, your Westpac personal loan will be approved and drawn down in your bank account. In fact, you can obtain approval as quickly as one business day. To summarize, an unsecured personal loan with Westpac is a good alternative for startups to get loans with no collaterals.

On the other hand, you should also be wary of the conditions attached to a personal loan. The biggest drawback is that your name becomes attached to the loan, instead of your business’s name. So, if the business fails and is declared bankrupt, the loss becomes a personal liability. As a result, your personal credit score will be affected. Do also remember the interest rates imposed on personal loans are higher, as opposed to business loans.

4. Find a Co-Signer 

With a sketchy credit history, the odds of obtaining a bank loan can be rather low. Even if you succeed, your financing rate is likely to be on the high side as lenders will have to bear a higher risk of default.

To secure a business loan despite poor credit score, you can get help from a co-signer or guarantor. A guarantor takes on the responsibility to repay your loan in case of default. A guarantor pledges his or her own assets or service to the loan if the original debtor does not pay the loan obligations. As a rule of thumb, ensure that your guarantor has a good credit score to secure a better approval rate of the business loan application. Moreover, the process of undertaking a co-signor can be tedious and burdensome.

5. Secure a Line Of Credited Via Business Overdraft

Do you need cash for your business quickly? Through the valleys of business challenges, you may need additional cash flow. You may need the boost in cash flow to pay suppliers, wages, or pitch for larger jobs. In such scenarios, obtaining an additional credit line via an unsecured business overdraft will meet your needs. With Westpac’s Unsecured Business Overdraft, you can borrow up to $50,000 with no collateral or asset security needed. Once your business operating account linked to the Westpac Unsecured Business Overdraft, you can operate in debt even when cash flow is tight.

Through Westpac’s simplified online application process, you can easily get a loan from Westpac with bad credit. As such, you can simply draw down the additional credit within 24 hours from approval.


The road to getting your new business up and running is riddled with potholes and detours. For most startups, getting the needed financing to launch the business is the most common challenge faced. Likewise, being profitable in the first few years of business can be stressful. It is, therefore imperative to secure financing from a reputable bank. You should work with a bank that will lend you the money, offer transactional convenience and other banking services to thrive through good and bad times. Recognizing this, Westpac’s immense breadth of experience in business financing translates to better financing options for clients with bad credit scores.


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