Defaults don't end the conversationFinance, priced in plain English

The situation

A default, a judgment, arrears on a previous facility, or a prior business insolvency doesn't disappear from a credit file just because the business has since recovered, and it doesn't stop a business or investor from needing finance in the meantime. Borrowers in this position have usually already been declined by one or more mainstream lenders, often without a clear explanation of what specifically caused the decline, and are understandably wary of what a private lender might actually offer, or whether the pricing will make the facility unworkable.

The circumstances behind these events vary enormously — a bad debtor, a relationship breakdown, a business partner's conduct, a genuinely difficult trading period during a downturn — and are rarely a fair reflection of how the business or the individual operates today. What's needed is a lender prepared to hear that context rather than one whose process stops at the credit file itself.

Why the first answer is often no

Bank credit policy generally screens on the credit file itself — a default, a judgment, a bankruptcy or a liquidation in the applicant's history — before it looks closely at the current position, the security available, or the story behind what happened. This is efficient for a bank assessing large volumes of standard applications, but it means genuinely fundable borrowers get filtered out automatically rather than assessed on their actual circumstances. The credit event is treated as the whole picture, when in most cases it's one data point in a longer story that includes what's changed since.

Time since the event, the size of the amount involved, and whether it's fully explained and resolved all matter more to a specialist lender than the fact of the event appearing at all — a five-year-old default with a clear cause reads very differently to a lender used to seeing this category than it does to an automated bank scorecard.

How it gets funded

Impaired-credit commercial loans are built specifically for this category, assessed case by case on the security offered, the current business position and the exit, rather than filtered by credit score. A caveat loan or second mortgage can fund against property quickly where the credit history has ruled out a bank facility, and a private first mortgage can support a full purchase or refinance at a more conservative LVR than a bank would extend even without impairment.

Security is central here — property is what allows a lender to look past a credit event that would otherwise stop an application at the door. Pricing reflects the risk and is set out in plain English before commitment, and the exit is worked through upfront rather than assumed, since a facility placed without one is a facility placed badly, whatever the security behind it.

What to have ready

Details of what's on the credit file and when it occurred, a short explanation of the circumstances and what's changed since, property or security details, entity and director documents, and current evidence of trading or income. A copy of your actual credit file, rather than a general description of what's on it, lets us confirm exactly what a lender will see before we approach anyone.

Working with us

We start by asking about what's on file directly, rather than treating it as something to work around or minimise, because lenders in this category expect some credit impairment and assess around it. Being upfront about the history, together with clear evidence of the current position, produces a better outcome than an application that tries to obscure it.

We won't place a facility that doesn't have a workable exit, regardless of how attractive the security looks on paper, and we set out pricing plainly before you commit to anything. If a lender's own dispute-resolution process becomes relevant at any point, we'll point you to it directly, and we stay available afterwards as your position continues to improve, since terms available a year or two after the event are often materially better than at first enquiry.

We're also upfront when a request genuinely isn't fundable in the current circumstances, rather than running a speculative application that produces a decline on top of an already difficult credit file. In those cases we'll say plainly what would need to change — typically time, a cleared balance, or additional security — for the position to improve.