Secured Business Loans

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What is a Secured Business Loan?

A secured business loan is one which is backed by an asset, usually a commercial, residential or buy-to-let property.

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Why Choose a Secured Business Loan?

A secured loan typically reduces the risk for lenders, so borrowing is often cheaper with lower interest rates and longer repayment terms.

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How it Works:

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Secured Business Loans at a Glance

What is a Secured Business Loan?

With a secured business loan, a commercial, residential or buy-to-let property can be used as collateral to raise the finance you require. With secured lending, you will often be able to secure a higher amount of borrowing as the security essentially lowers the risk of the lender. As a result, interest rates and repayment terms are also often more competitive than an unsecured loan and they are typically easier to obtain even for those with less than perfect credit.

Why Choose a Secured Business Loan?

Due to high value assets being offered as security, a secured loan is often cheaper than an unsecured loan, with typically lower interest rates and longer repayment terms, which means lower monthly repayments. Alongside this you will generally be able to access larger loan amounts subject to available equity in the property and affordability. Secured business may also be a good option for those with a poor credit history who have been unable to obtain other types of borrowing. Finally, a secured business loan is usually easier to obtain for a start-up business that has little trading history.

Key Benefits of a Secured Business Loan:

The following are just some of the benefits of secured business funding:

  • Easier to obtain than unsecured borrowing due to reduced lender risk.
  • Access to higher loan amounts subject to loan-to-value (LTV).
  • Lower interest rates and longer terms for repayment.
  • Viable option for those with adverse credit who otherwise might not be able to obtain an unsecured loan.
  • Available to start-up businesses and those with a short trading history.

How it Works

As a secured business loan is generally secured against a high value asset such as property, the process will usually involve valuing the property to ensure there is enough available equity to support the borrowing and determine how much you are able to borrow.

Secured business loans will typically have fixed interest rates and monthly repayments until the loan is repaid. As the property is being used as collateral it is generally seen as lower risk to the lenders and interest only options are also available. However, if you default or fail to repay the loan then your property is potentially at risk.

To discuss if you could be eligible for a secured business loan and how much you could borrow, please get in touch with our business funding specialists today.

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