Secured Business Loans
Secured Business Loans are ideal for businesses seeking larger loan amounts with potentially lower interest rates, provided they can offer assets as collateral. These loans are beneficial for substantial investments or significant capital expenditures.
Discover your funding options
Check your eligibility for a secured business loan with our online form without affecting your credit score.
*This loan example is for illustrative purposes only. All finance and quotes are subject to status and income. Click here to check your eligibility to receive options tailored to your circumstances.
Loan Details
As opposed to unsecured loans, Secured Business Loans require the business to offer an asset as security. This can include commercial property, vehicles, machinery, or accounts receivable. The loan amount depends significantly on the asset's value used as collateral.
Eligibility and Application Process
These loans are accessible to a wide range of businesses, including start-ups, given the presence of valuable collateral. The application process may include an assessment of the asset's value and the business's ability to repay the loan.
Loan Amounts and Terms
The loan amounts can range from £30,000 to £500,000 or more, depending on the value of the collateral and the business's financial situation. The terms are typically aligned with the asset's lifespan and are designed to be manageable and sustainable.
Interest Rates and Repayment
Secured loans often have lower interest rates due to the lowered risk presented by the collateral. Repayment terms are usually favourable, and some lenders may offer the option of early repayment.
Utilisation and Flexibility
The loan can be used for a variety of purposes, including buying stock, expanding operations, or acquiring new equipment. There is often flexibility in how the funds are used, as long as it aligns with business growth and sustainability.
Comparison with Unsecured Loans
Unlike unsecured loans, secured loans typically involve a more extensive application process due to asset valuation but often result in quicker fund disbursement and more favourable interest rates due to the reduced lender risk.
Frequently asked questions
What is a secured business loan?
A secured business loan is a type of loan where the borrowing is backed by a business asset, such as property, machinery, or vehicles. If the loan is not repaid, the lender can seize the asset.
Who can apply for a secured business loan?
This type of loan is available to most types of UK-registered businesses, including sole traders, partnerships, and limited companies, provided they have an asset to offer as security.
What are typical loan amounts for secured business loans?
Loan amounts can range significantly, typically from £30,000 to £500,000 or more, based on the value of the collateral and the financial standing of the business.
What assets can be used as collateral?
Common assets used as collateral include commercial property, equipment, vehicles, and sometimes accounts receivable.
What is the typical repayment term for a secured business loan?
Repayment terms can vary but often range from one to ten years, depending on the loan amount and the lender’s policies.
Can I repay my loan early?
Yes, many lenders allow early repayment, but it’s important to check if there are any penalties or fees for doing so.
What happens if I can’t repay the loan?
If you fail to repay the loan, the lender has the right to seize the asset used as collateral to recover the outstanding amount.
What documents are required to apply for a secured business loan?
You’ll need to provide detailed information about the asset being used as collateral, alongside business financial statements, proof of ownership of the collateral, and potentially a business plan.
Are secured business loans suitable for new businesses?
Yes, they can be, particularly if the business has valuable assets to offer as security, but the terms might be stricter compared to established businesses.
How long does it take to get an unsecured business loan?
The time can vary, but some lenders offer decisions within 24 hours with funds potentially available within days.
Get a secured business loan
Limited companies can receive a loan decision without impacting their credit score. This allows you to evaluate your options without worry.
