Will you lend to my business if I've had a hardship arrangement on my home loan?

Short answer: often, yes — case by case. A hardship arrangement on your home loan doesn’t put a black mark on your file the way a default does. If you paid what you agreed to pay, your report shows those months as met, with a small marker next to them, and that marker can’t be used in your credit score. What lenders really want to know is simpler: what happened, is it over, and can the business handle a new repayment?

That’s the verdict. Now let’s look at what’s actually on your file, because most owners imagine something much worse.

What actually shows on my credit report?

Before July 2022, a hardship arrangement was messy for credit reports. If your lender agreed you could pay half for three months, your report could still show those months as behind. People were penalised for doing the responsible thing and asking for help early.

That changed with the financial hardship reforms that started on 1 July 2022. According to the OAIC, there are now two kinds of marker:

Type of arrangement	What it means	What shows on your report	When it disappears
Temporary	Repayments paused or reduced for a set period	An “A” against each month of the arrangement	One year after the arrangement’s final repayment
Variation	A permanent change, such as a longer loan term	A single “V” against the month it started	One year after the arrangement started

Three things are worth knowing straight away:

• Your repayments are measured against the arrangement, not the original loan. If the deal was $1,500 a month instead of $3,000 and you paid $1,500 on time, those months show as met.
• The reason isn’t on there. Illness, a slow trading year, a separation, a flood: none of it appears. The report only says an arrangement existed.
• It can’t touch your score. The Credit Reporting Code “prohibits the use of financial hardship information to calculate an individual’s credit score”, as the OAIC put it when the rules came in.

One more bit of good news. Just asking for hardship help isn’t reported. Only an arrangement that’s actually agreed shows up. And while your lender is considering your request (and for 14 days after it says no), it generally can’t list a default against you, according to the OAIC’s page on repayment history and defaults.

So why would a business lender care at all?

Because a marker is still a clue, and lenders are paid to follow clues.

Your score doesn’t move, but a lender who pulls your consumer credit file as a director or guarantor will see the “A” or “V” markers. Seeing them doesn’t mean a no. It means a question: “Tell me about this.”

Here’s what they’re quietly weighing:

1. What caused it? A one-off event that’s clearly behind you (an injury, a sick parent, a flood that shut the shop for a month) reads very differently from ongoing trouble paying the bills.
2. Is it finished? A finished arrangement is a story with an ending. One that’s still running means your household budget is still stretched, and a new business repayment would land on top of it.
3. What’s happened since? Three to six months of normal repayments after the arrangement ended is strong evidence that things are back on track.
4. Do the business’s own numbers stand up? For unsecured and cash-flow lending, your business bank statements usually matter more than anything on your personal file.
5. Was there anything else? Hardship on its own is mild. Hardship plus defaults, a pile of recent credit enquiries and an ATO debt is a busier picture, though it’s still not automatically a no.

Not sure where your file sits? Tell us what happened and a real person will give you a straight read. There’s no credit check to ask.

Does it matter which loan the arrangement was on?

A little. Hardship information can show up for credit products like home loans, credit cards, personal loans and car loans, as CreditSmart explains. Arrangements with phone, internet or energy providers, and buy now pay later accounts, don’t appear as hardship information at all.

A home loan arrangement gets the most attention, for one practical reason: your home is often the thing a business lender would like to use as security.

Can I still use my home as security?

This is where timing matters most.

While the arrangement is running, putting a second mortgage or caveat behind your home loan is usually hard. The first mortgage lender has just agreed your household can’t currently meet the full repayment. Asking to borrow more against the same property, behind them, is a tough sell, and their consent may be needed anyway. Our page on borrowing when your home already has a mortgage explains how that ranking works.

Once it’s finished and you’re back on normal repayments, the conversation changes. A property-secured lender looks mostly at the equity, the purpose and how you’ll repay. A finished hardship arrangement on the home loan becomes one line in your explanation, not the headline.

If you have other property (an investment unit, a commercial premises, land), that can sometimes do the job instead, leaving the family home out of it. Property-secured business loans range from $20,000 to $5,000,000, and the security matters more than a tidy credit file.

What if the hardship came from the business itself?

Plenty of owners hit hardship on the home loan because the business had a rough patch. They pulled money out of the household to keep the doors open, the mortgage got squeezed, and they asked the bank for breathing room. That’s honest and common, and lenders understand it.

The question it raises is whether the business problem is fixed. Show that clearly:

• Turnover recovery. Point to the months in your bank statements where deposits came back.
• What changed. A new major customer, a price rise, a cut in overheads, a loss-making service you dropped.
• Lodgements up to date. BAS and tax returns lodged, even if there’s an ATO payment plan running.

If revenue is still sliding, read our page on borrowing when revenue has dropped before you apply. It may be a better first step than a loan application.

An illustrative example: the café owner in Perth

This is an illustrative scenario, not a real client.

Mia runs a small café in Perth’s northern suburbs. Early in 2026 a major roadworks project cut foot traffic for four months. She dipped into household savings to cover wages, and the home loan got tight. She called her bank, explained, and agreed a three-month temporary arrangement at reduced repayments. She made every reduced payment on time.

The roadworks finished in May. Trade recovered over winter, and by October her deposits are back above where they were a year ago. Her home loan has been on full repayments since June. Now her coffee machine is dying and she’d like about $45k for a new machine and a refreshed counter.

What a lender sees:

• Three “A” markers on her home loan from early 2026, with the repayments met. No defaults.
• A clear, one-off cause that has ended.
• Four months of normal mortgage repayments since.
• Business bank statements showing recovered, steady turnover.

That’s a very workable file. Unsecured or cash-flow options sized on her turnover may suit. If she’d rather use equity, it’s a fair question now that the arrangement is behind her. The thing that helps most is a short explanation that names the cause and the dates before anyone has to ask. Our guide on explaining your situation to a lender on one page has a template.

Change one detail: if the arrangement were still running and trade hadn’t recovered, the honest answer would be “not yet”. That’s not a judgement on Mia. It just means a new repayment would make the original problem worse.

How do I get ready before I ask?

You don’t need to wait for the marker to drop off. You do need to know what’s on your file and be ready to talk about it.

1. Get your own credit report. You can get a free copy from each credit reporting body once every three months, according to the OAIC. Check which accounts show markers and for which months.
2. Check for errors. If an arrangement shows as missed payments, or a marker is still there after the 12 months are up, ask the credit provider to fix it. Corrections are free.
3. Note your dates. When the arrangement started, when it ended, when full repayments resumed.
4. Write two or three sentences. What happened, what you did, what’s different now. Keep it factual.
5. Pull six months of business bank statements. Those usually matter more than your personal file for trading-business finance.
6. Don’t scattergun applications. Every formal application can leave an enquiry on your file, and a cluster of them on top of a hardship marker looks like someone being turned down repeatedly.

Want a quick sense of where you stand first? Our situation search answers common “will you lend to me if…” questions in seconds, including what happens with a past default if your file has one of those too.

Is a hardship arrangement worse than a default?

Much better, in almost every case. A default is listed when a payment of $150 or more is at least 60 days overdue and the lender has sent the required notices. It stays on your file for years and can affect your score. A hardship arrangement is the opposite story: you put your hand up early, agreed a plan and stuck to it. Lenders know the difference, and many quietly respect the owner who rang the bank before things went wrong.

Ready to find out where you actually stand?

You did the hard thing already. You noticed the pressure, picked up the phone to your bank and kept to the deal. That’s exactly the behaviour lenders hope to see. A marker on your report is a footnote to that, not the headline.

So the next question is whether someone will back your business now. That’s what we’re here for. We look at files with hardship arrangements, past defaults and ATO plans regularly, and we’d rather hear the whole story than have you guess.

Enquiring takes about 60 seconds, and there’s no credit check when you first enquire, so asking won’t add another line to your report. We don’t send your details to a pile of lenders either, so your phone won’t light up with strangers. A real person reads what you’ve told us and calls you to talk through your situation.

One request: please fill in the form accurately. Mention the arrangement, roughly when it ended and what you need the money for. Getting it right up front means we can match you with the right option first time, rather than finding out halfway through.

See if you qualify →