Secured Business Loans2018-09-17T08:41:08+00:00

Secured Business Loans

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What Is A Secured Business Loan?

Most business loans are offered on an unsecured basis, meaning the lender takes no security for the loan other than a personal guarantee. Although this works well in most situations, unsecured business loans aren’t right for every situation.

Secured business loans are designed to fund your company in situations where an unsecured loan may not be possible. The loan is secured against property, usually the businesses trading premises.

By taking security, the lender is far less likely to lose money as a result of the business failing to keep up the repayments.

Secured business loans are ideal for businesses who aren’t able to borrow using an unsecured loan, or would like to borrow more than would usually be possible using unsecured finance.

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Secured Business Loan Uses

Secured business loans can be used for almost any business-related reason. From covering a funding gap to purchasing new equipment or even funding growth, there will be a secured business loan for you.

Terms And Criteria

Our secured business loans are available for any amount from £26,000 – with no maximum loan size.

Unlike unsecured loans, secured business loans can be taken for up to 25 years. This leads to far lower monthly payments, easing the burden on your business’ cash flow.

The interest rate charged on a secured business loan is usually much lower than a comparable unsecured loan, due to the reduced risk to the lender.

In addition to a legal charge against the security property, most lenders will usually still ask for a personal guarantee when taking out secured lending.

Alternative Security

Where a building is not available as security for the loan, we have other lending options available and can consider any security, such as:

  • Residential property
  • Land
  • Equipment and machinery
  • Invoices
  • Vehicles

The Pros And Cons Of Secured Business Loans

When considering whether to take out secured or unsecured finance for your business, there are several factors to consider. Each business is different and the way they collect payment also differs greatly.

There is no one size fits all product for business borrowing, and no ‘best’ product, each business must consider which option suits their needs.

We have broken down a number of the pros and cons out secured business lending to make that process simple.

Pros

  • Secured lending is usually cheaper, due to the reduced risk to the lender.
  • Secured lenders will allow you to borrow the money over a longer term, reducing your monthly repayments.
  • The addition of security usually allows you to borrow more money than would be available on an unsecured basis.
  • Adverse credit can cause a major problem during unsecured business loan applications. Secured lenders tend to take a view on previous problems, as long as there is a good reason for them, meaning your application is far more likely to be accepted.

Cons

  • As the security will need to be valued and a legal charge placed on the property, there will be fees to pay upfront. The valuation and legal fees must be paid during the application process, meaning you will have to spend money before you receive a penny. In addition, if the valuation is unfavourable, then the loan may even be declined, meaning the valuation fee is wasted.
  • When borrowing over a longer term, the total interest charged will usually be higher. It’s important that you consider the total cost of the loan before moving forward.
  • To secure a loan against something, you need the asset in the first place. If you don’t have suitable assets, you should consider another type of business funding.
  • Due to the additional checks, including the valuation and legal process, applications take much longer to complete than unsecured borrowing. Applications can take several weeks, depending on the lender.

How To Get Started

To get a secured business loan quote, enquire online or give us a call on 01922 620008. One of our business finance experts will talk through your situation and offer you written terms within two hours of your enquiry.

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