Secured Business Finance
Table of Contents
What is Secured Business Loan?
Secured Loan also known as asset-backed lending against a business asset. It can be offered against assets such as equipment’s, property or machinery as security after evaluation.
If you are a business owner based in the UK looking out to lend capital for the growth of your business, loan against secured assets could be a great option for you. Since it involves lenders to access finance against secured business assets, this is also known as assets-backed lending.
Here’s everything you need to know about a Secured Business Loan: By utilizing your business assets such as property, machinery or equipment’s, you could have accessibility to a high value secured business loan from £5,000 to £20million.
Since business assets are involved, this type of lending lowers the risks of your financers which results in competitive interest rates and repayment terms. The assets could be used to recover the funds, if the business is unable to repay the loan.
Is my business eligible for a secured business loan?
If you have a UK registered business that has been trading for minimum of 3 months. Incase you have a bad credit history; you may have to demonstrate a sustained period of growth.
- Start-up and or actively trading business can apply
- UK Businesses
- Sole traders, Limited company or Limited liability partnership (LLP) in the UK.
- You must own singular or multiple valuable assets
Our Finance lenders will not require comprehensive business plans as compare to high street banks.
What are the advantages or merits and disadvantages or demerits of unsecured business loans?
Advantages or Merits
Comparatively secured business loans are often cheaper to repay than an unsecured business loan and the interest rates are typically lower as well. Lenders offer more flexibility with their funding strategies and can offer.
- Possibility of getting up to 100% of the asset value.
- Access with almost all types of credit history.
- Higher Loan amount ranging from £5000 to £2million.
- longer repayment tenures of up to 7 years.
- Suitable for medium to long term funding.
Your funding application could be approved within 48hours to 72hours by our lenders.
Disadvantages or Demerits
- Property collateral at risk
- Not better then unsecured loan
How it works?
A secured loan can be offered against valuable assets such as commercial or personal property. As explained above, other forms of securities such as equipment’s, property or machinery can also be used. It’s identical to applying for a mortgage and often involves the asset valuation.
Most of the secured business loans are offered at a fixed rate, monthly repayments are made until the loan is completely paid off. Defaulted payments or failure of payments may potentially put the asset at risk for recovering the loan.
How much finance can you get with a Secured Business Loan?
The value of the asset pledged will decide the amount that can be financed. The asset’s value will have to cover the finance expected. 100% of the asset value is usually financed by most lenders.
For Example: If the lender is offering 100% of the property value and if the property value is £200000 then you can borrow £200,000.
What types of assets can be used for borrowing secured business loan?
Both Tangible and Intangible assets are usually considered by most of the financers. Most common assets include Machinery & Equipment, Vehicles, Land, Personal and Commercial assets.
Multiple assets net worth could also be considered by some financers. Residential property, car or shares can also be offered as a personal asset as a security. As a form of security, a personal guarantee or debenture could also be asked by some lenders.
What are the types of Secured Business Loan?
Interest Only | Term Loan | Bridging Loan |
Fixed tenure of 5 years | Fixed tenure of up to 7 years | Short tenure of up to 2 years |
Great for startups in need for finance | Stage payments are considered | Great for bridging gaps in company finances |
Flexible with monthly repayments | Conventional approach of monthly repayments | Mostly used for purchasing property |
Borrow from £25k to £20m | Borrow from £25k to £20m | Good option till long term finance is received |
Flexible closure with one month’s interest | Flexible closure with one month’s interest in some case | Traditional loan closure once tenured is reached |
Frequently Asked Questions
You don’t wish to go with Secured Business loan?
No problem, we do have the options for Unsecured loan.
Can I get secured loan with an existing Mortgage?
Yes, it’s worth knowing that if a property has an existing mortgage, the lender may register a legal or equitable charge.
Can I get a secured business loan for a start-up / new business?
Yes, if an asset is available a loan can be granted.
Can I can get secured business loan with existing loans?
Yes, it's a matter of affordability, our experts can help you with suitable options.
What If I do not possess any assets to secure against the loan?
Incase of lack in asset for a secured business loan or you don’t want to offer your asset as a security against a loan, an Unsecured Business loan can be a great solution for your need. On the other hand, we offer a wide range of funding options that can offer perfect solution for your business.