These are the loans which are based on your credit history. It means that you already have more than two loans and due to poor business or low business income you have not been able to pay back the loan in full or in time and you do not have necessary income coming to meet the pay back, therefore you have asked for another loan in order to pay back your earlier loans.

Imagine the risk the money lender is taking if he agrees to give loan to a person or business that is already a defaulter or is not in a financial state to pay back some loans obtained earlier. Such a loan is called Bad Credit Business Loan. The financial state of the borrower is stated as Bad Credit History. When ever a financial company or a bank offers loan to one with a bad credit history, or to one who is already involved in litigation for non-payment of loans or to those who are facing bankruptcy.

The lenders always charge much higher interest rates; they feel the pressure of the risk involved, these rates are based on the financial condition of the borrower. In most cases the Bad Credit Business Loan is sanctioned considering the factors like the reputation of the borrower, his or her life style ad not only the credit history. Therefore the defaulters are also eligible for more loans, but the terms and condition they have to face or fulfill will be much tougher.

There are two kinds of Bad Credit Loans, the secured loans and the unsecured loans. The Secured loan is the one which have the support of some sort of collateral, a house or a valuable property or even jewelry or a car. The property is mortgaged as a guarantee.

Remember, there is always an element of risk for the borrower, when mortgaging valuable property to get a loan sanctioned. In case of a default he or she may lose the valuable property. However getting secured loan is always easy irrespective of your credit history. Unsecured loan will most probably be based on higher interest rates and lesser amounts.