Secured Business Loans

Secured loans and asset finance are both forms of lending backed by assets, but they work differently:

• A secured loan is a lump-sum loan secured against property, equipment, or other business assets, giving you flexibility to use the funds for a variety of business needs.
• Asset finance, on the other hand, is specifically designed to purchase or lease a particular asset, such as machinery, vehicles, or equipment, with repayments tied to that asset.

Essentially, secured loans provide broader funding options, while asset finance is focused on acquiring specific business assets.

Secured loans are backed by an asset, which acts as collateral for the lender. This typically allows for larger loan amounts, longer terms, and lower interest rates. Unsecured loans, by contrast, do not require any collateral, so approval is based on the business’s creditworthiness, cash flow, and trading history.

While unsecured loans are generally quicker to arrange, they often come with higher interest rates and lower borrowing limits.

You can typically borrow from £10,000 up to £300,000 across many of our shorter-term secured business loans. However, for certain types of finance, such as a secured acquisition loan, funds up to £5 million can be provided.

The main documents required for a secured business loan often include:

• Business Plan: Outline your business and how the loan will be used
• Financial Statements: Income statements, balance sheets, and cash flow statements
• Tax Returns: Personal and business tax returns for the past few years
• Bank Statements: Recent bank statements
• Legal Documents: Business licences, registrations, and ownership agreements

Times vary by lender and complexity, but we can arrange quick turnarounds for many business loan products – some of which can be agreed in 24 to 48 hours for simpler cases. However, since secured facilities are often more bespoke, certain financial arrangements may take a little longer to arrange.

Rates depend on loan size, asset, term, and borrower profile. Typically, rates start from around 7% for the majority of our products. Exact rates are set by the chosen lender and will be shown in your proposal, so there are no hidden costs involved.

Secured loans use an asset as collateral, which means if repayments are missed, the lender can take action to recover the asset. Other risks include:

• Interest rate changes: Variable rates can increase your repayments.
• Impact on credit score: Late or missed payments can negatively affect your credit rating.
• Fees and charges: Early repayment or administrative fees may apply.
• Negative equity: If the asset’s value falls below the loan amount, you could owe more than it’s worth.
• Limited flexibility: Secured loans can be harder to restructure or refinance than unsecured loans.

It’s essential to fully understand the legal terms and implications of the loan and seek professional advice if you’re unsure.

Our commercial finance brokers act as an intermediary for your funding requirements. We assess your needs, use our panel of over 104+ lenders, prepare and submit applications, and negotiate terms – simplifying your search for a suitable secured facility.

Yes. While approval isn’t guaranteed, using collateral can increase your chances of approval and may allow access to larger amounts or more flexible terms. Lenders are primarily concerned with the value of the security and your ability to repay, rather than just your credit history.

However, it is generally best practice to improve your business credit score for the most favourable terms and conditions.