Long term business loans for bad credit

• Cash flow challenge: Businesses with adverse credit often relying on short-term or high-cost funding, creating ongoing repayment pressure that restricts long-term growth and financial stability.

• Perfect for: Established UK businesses with stable turnover that need funding over three years or more and can demonstrate affordability despite historic credit issues

If your business has struggled with credit in the past but now needs stable, structured funding, a long term business loan for bad credit may still be possible. 

This guide explains what qualifies as long term, who it’s suitable for, and how lenders assess applications.

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What is a long term business loan?

A long-term business loan typically means:

• Repayment terms of 3 to 10 years

• Fixed monthly repayments

• Larger loan amounts

• Lower monthly costs compared to short-term funding
• Often secured or partially asset-backed

This differs from short-term loans, which usually run for 3 to 18 months with higher monthly repayments.

Can you get a long term business loan with bad credit?

Yes, however approval depends less on your historic credit score and more on:

• Current revenue performance

• Cash flow stability

• Time trading
• Existing liabilities
• Security available (if required)

Most high street banks are unlikely to approve long-term finance with adverse credit. However, specialist and alternative lenders may consider:

• Asset based loans

• Secured lending

• Director guarantees
• Strong turnover evidence

Why businesses seek long-term funding instead of short-term

Many businesses with bad credit turn to short-term funding out of necessity.

But short-term borrowing can:

• Create high monthly repayment pressure
• Lead to repeated refinancing
• Increase overall funding costs
• Strain working capital

Long-term funding spreads repayment over years instead of months - reducing monthly strain.

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Long term loan repayment example

Example: £100,000 funding requirement

Option 1: 12-month short-term loan

Monthly repayment: approximately £9,500

Total repayable: approximately £114,000

Cash flow pressure: very high

Option 2: 5-year long-term loan

Monthly repayment: approximately £2,300

Total repayable: approximately £138,000

Cash flow pressure: significantly lower

While the total cost may be higher over time, monthly affordability improves dramatically. For businesses focused on stability and growth, this trade-off can be strategic.

Types of long-term business finance available with bad credit

Secured business loans

Using assets such as:

• Commercial property
• Equipment
• Vehicles
• Debtors

Security reduces lender risk and increases approval chances.

Asset finance

Funding tied to:

• Machinery
• Vehicles
• Specialist equipment

The asset itself acts as collateral, making approval easier even with adverse credit.

Invoice finance facilities

For B2B businesses with strong debtor books, invoice facilities can run for years rather than months.

Approval focuses heavily on:

• Customer credit quality
• Ledger strength
• Turnover consistency
  

Merchant cash advance

Merchant cash advances often appear as long-term solutions but are revenue-based and typically short-cycle.

They may be useful as bridging finance but are rarely structured over multiple years.

What lenders look for instead of credit score

With bad credit, lenders focus on:

• Monthly turnover
• Bank statements
• Profit margins
• Industry stability
• Existing borrowing commitments
• Reason for historic credit issues

Interest rates and pricing expectations

You should expect:

• Higher interest rates than prime borrowers
• Arrangement or broker fees
• Personal guarantees in many cases
• Security requirements for larger sums

Rates depend heavily on:

• Risk profile
• Loan size
• Security offered
• Cash flow strength

How to improve approval chances

To strengthen your application:

• Prepare up-to-date management accounts
• Demonstrate consistent revenue
• Reduce unnecessary credit searches
• Be transparent about previous credit issues
• Offer security if available

How Novuna Business Cash Flow can help

At Novuna, We work with specialist UK lenders who consider businesses with adverse credit.

Get in touch with our experts today and we will find a great fit for your situation.