Can You Get a Commercial Loan with Bad Credit in Texas?
Yes — and more often than you might think. Commercial lending is fundamentally different from residential mortgage lending. Banks underwriting conventional home loans have strict FICO cutoffs enforced by Fannie Mae and Freddie Mac. Commercial lenders — especially private lenders and hard money lenders — have far more flexibility because the loan is secured by a real asset with real value.
If the property is strong, the deal makes sense, and you have equity in the transaction, bad credit is a hurdle — not a wall.
What “Bad Credit” Means in Commercial Lending
There’s no universal cutoff. Different programs have different thresholds:
- 700+: Full access to all programs including CMBS, agency, and best bank rates
- 660–699: Conventional bank lending available; slightly higher rates
- 620–659: Some bank programs, SBA with stronger compensating factors, stated income programs
- 580–619: Hard money and private lending territory; asset-based approval
- Below 580: Hard money, asset-based only — 100% focus on property value and equity
- No FICO / No credit pull: Hard money programs exist where credit is not checked at all
Why Bad Credit Happens — and Why Lenders Look Past It
Experienced commercial lenders understand that credit scores tell an incomplete story. Common situations where strong borrowers have damaged credit:
- Medical emergency that caused missed payments
- Business failure or partnership dispute
- Divorce and the financial disruption that follows
- COVID-era deferrals that were reported incorrectly
- Identity theft or credit reporting errors
- Strategic decisions (like a business bankruptcy) that were the right move financially
A hard money lender asking “what’s the story behind that score?” is very different from a bank that won’t even take your call.
Loan Options for Bad Credit Commercial Borrowers in Texas
Hard Money Loans — No Minimum FICO
The most accessible option for bad credit commercial borrowers. Approval is based 100% on the property value and equity position. We do not pull credit as a condition of approval. See our no credit check hard money loan page for details.
Stated Income Commercial Loans
No tax returns, flexible credit requirements. The stated income program focuses on bank statements and the property’s income rather than your personal credit history. Minimum credit scores vary by program — some go as low as 580.
Asset Depletion / Asset-Based Loans
If you have significant liquid assets (savings, brokerage accounts, retirement funds) but damaged credit, some lenders will qualify you based on asset depletion — dividing your liquid assets over the loan term to create a qualifying “income.” Strong assets can offset weak credit.
Partner or Co-Borrower Strategy
Adding a co-borrower with stronger credit can unlock conventional loan programs that you couldn’t access alone. The co-borrower’s credit profile drives the approval; both parties share liability.
What Bad Credit Commercial Loans Cost
Bad credit means higher risk to the lender — which means a higher rate to you. Here’s the trade-off:
- Hard money (no credit): 9–13%, 1–3 points, 6–24 month term
- Stated income (580–620 credit): 8.5–12%, 1–2 points, 5–30 year term
- Conventional (620–660): 7.5–9.5%, 0.5–1.5 points, 5–10 year term
The strategy: use a higher-cost short-term loan now to acquire the asset, improve your credit profile over 12–18 months, then refinance into better long-term financing.
Get a Bad Credit Commercial Loan in Texas
Tell us about your deal and your credit situation — honestly. We’ve seen it all, and we’ll tell you straight what’s possible and what it costs. No judgment, no runaround. Direct lender since 1998.
Apply Now — No Credit Pull Required to Get Started