What counts as bad credit for a business?
Bad credit for a business is any record that suggests it has struggled to pay what it owed on time: county court judgments, defaults on past borrowing, a pattern of late payments, or in some cases a file so thin that a lender has nothing to go on. There is no single threshold; every lender scores against its own criteria.
What the record shows matters less than what a lender reads into it. A satisfied CCJ from four years ago with steady trading since is a different proposition from an unpaid judgment last month, even though both are "bad credit" on paper.
What goes on a business credit file?
The entries lenders weigh most heavily are the ones that show a debt going unpaid. For a limited company they sit on the company's file at the credit reference agencies; lenders also commonly search the directors personally, so a director's own record matters too.
- County court judgments (CCJs): a court order to pay a debt. Funding Options notes a CCJ can appear on a credit record for six years, and that a satisfied CCJ is viewed more positively than an unsatisfied one.
- Defaults: a lender recording that an agreement was broken, typically after several missed payments.
- Late payments: not as damaging as a default, but a run of them shows a business paying when it can rather than when it must.
- Thin files: a newly formed company or one that has never borrowed has little for a lender to assess, which some treat as a risk in itself.
How long does a CCJ stay on a business credit record?
Six years in the normal case. Rangewell notes that an unpaid CCJ stays on record for six years unless it is paid within 30 days of the judgment, in which case it can be removed from the register. A judgment paid after that window stays for the full six years but is marked as satisfied, and lenders generally read a satisfied judgment more favourably than an outstanding one.
| Entry | Typical time on record | How lenders commonly read it |
|---|---|---|
| CCJ paid within 30 days | Can be removed from the register | Minimal lasting effect |
| CCJ satisfied after 30 days | Six years, marked satisfied | Viewed more positively than unpaid |
| CCJ unpaid | Six years | Significant; many lenders ask for proof of a payment plan |
| Default | Six years | Significant while recent; improves with time and clean payment |
| Late payments | Varies | Matters most when recent or repeated |
What do lenders actually weigh?
Broadly, how long ago the problem was, what the repayment history looks like since, and what the cash flow looks like now. Funding Options lists time since the debt, repayment history and cash flow as the factors lenders assess alongside the judgment itself. A lender may also ask for evidence that a CCJ is satisfied or that a payment plan is in place before it will proceed.
Product choice shapes this. One review of YouLend's approach notes that a steady sales record counts for more than a spotless file, even though it searches both the business and its directors. Capify is reported to consider up to three CCJs, each no more than £10,000 and within three years. Those positions were checked in August 2026 and they change.
Which funding products commonly remain available with bad credit?
The products that stay open are generally the ones where the lender has something other than the credit file to rely on: an asset, an invoice, or a flow of card takings. Funding Options lists secured loans, invoice finance, revolving credit, merchant cash advance and asset finance as the products most commonly available to a business with a CCJ.
- Secured loans: the lender takes a charge over property or another asset, which reduces its reliance on the credit score.
- Invoice finance: the lender looks primarily at the creditworthiness of the business's customers, not the business itself.
- Merchant cash advance: repayment comes from card takings, so recent sales carry most of the weight.
- Asset finance: the asset being funded is the security, so the lender's exposure is to its resale value.
When is bad-credit funding not the right move?
Funding taken to cover an ongoing shortfall rarely fixes it. Where a business has marks on its file because it is structurally short of cash, a facility with a holdback or a personal guarantee can deepen the problem. Rangewell notes that personal guarantees are still commonly required on unsecured loans even where the business has a CCJ, so the director's own position is on the line.
A business in that situation commonly looks first at the cause of the cash-flow gap, and at free sources of help such as Business Debtline, before taking on new borrowing. This page is general information, not advice.
Frequently asked questions
Is there an official credit score that counts as "bad" for a business?
No. Each credit reference agency scores differently and each lender sets its own cut-off, so a business can be declined by one lender and accepted by another on the same file. Lenders generally look at the individual entries, the time since they happened and the business's current trading rather than a single number.
Does a director's personal credit affect a limited company's application?
Commonly, yes. Lenders generally search the directors as well as the company, particularly where a personal guarantee is required. A clean company file with a director who has recent personal defaults may still be treated cautiously.
Does paying a CCJ remove it from the record?
Only if it is paid within 30 days of the judgment, according to Rangewell, in which case it can be removed from the register. Paid later, it stays for six years but is marked as satisfied, which Funding Options notes lenders view more positively than an unsatisfied judgment.
Can a brand-new company with no history get funding?
A thin file is a different problem from a bad one, but it can be just as limiting. Published trading minimums include three months at YouLend, six at 365 Finance and one year at Funding Circle. Asset finance and secured products depend more on the asset than on trading history.
Marks on the file, trading well
CapExpand introduces UK limited companies and LLPs to lenders whose published criteria allow for adverse credit. Funding is subject to status.
Sources
Checked August 2026. Provider criteria change; confirm with the provider before relying on any figure.
- Funding Options: business finance with a CCJ (six years on record, satisfied vs unsatisfied, what lenders weigh, best-fit products)
- Rangewell: business finance with CCJs (30-day rule, personal guarantees on unsecured loans)
- Business Expert: YouLend review (sales record vs credit file, minimum trading)
- Business Expert: Capify merchant cash advance review (CCJ tolerance)
- 365 Finance FAQs (minimum trading, soft search)
- Funding Circle: small business loans (trading for one year or more)
- Business Debtline: free debt advice for small businesses
Important information
CapExpand Ltd is not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. We work with UK limited companies and LLPs only, for business and commercial purposes. We are not a lender and we do not provide financial, tax or legal advice. We work with a panel of lenders whose particulars are available on request, and we receive commission from the lender if a deal completes, at no cost to you. All lending is subject to status, valuation where applicable and the lender's own checks.
Registered office: Pure Offices, Lake View Drive, Annesley, Nottingham, NG15 0DT. Company No. 14433858.
CapExpand Ltd (Company No. 14433858) is a commercial finance introducer, not a lender. We are not currently authorised or regulated by the Financial Conduct Authority and do not provide financial advice. All information on this page is for educational purposes only. Funding is subject to status and lender criteria. CapExpand will receive a commission from providers at no extra cost to you.