What is a Secured Business Loan?

A Secured Business Loan is a type of financing where a borrower provides collateral, such as property, to the lender as security for the loan.
Businesses may choose this option to secure larger financing for substantial investments or expansions, benefit from lower interest rates, use valuable assets as collateral, or address a less favourable credit history.
  • Key Eligibility Criteria:
  • Min £100k turnover
  • Homeowner
  • LTV (Loan to Value) up to 80%
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Benefits at a glance

Lower Interest Rates

Secured loans often offer longer repayment terms at lower interest rates, resulting in lower monthly payments.Successfully repaying a loan can build their credit history, which can lead to better credit opportunities in the future.

More Attainable

Secured loans are generally more attainable, even for businesses with limited credit history or lower credit scores, owing to the collateral acting as a security measure for the lender.

Higher Loan Amounts

Secured loans typically grant businesses access to higher loan amounts in comparison to unsecured loans, leveraging collateral to offer added security for the lender

  • Most common industries:
  • Real Estate Developers
  • Commercial Vehicles
  • Manufacturers
  • Shipping and Logistics
  • Franchises
  • Hospitality
  • Construction

Types of Secured Business Loans

Here are some common types of Secured Business Loans:
    1. Fixed Term Loan:
      • Provides a lump sum repaid over a fixed period with interest.
      • Loan terms based on the borrower’s creditworthiness and business performance.
    2. Interest Only Loan:
      • Payments cover only the interest for a specified period, typically a few years.
      • After the interest-only period, payments include both principal and interest.
    3. Secured Line of Credit:
      • Offers a revolving credit facility secured by collateral like property or assets.

It’s possible for a business to use personal assets as collateral, often done when the business is relatively new. However, this approach carries personal risk and should be approached with caution.

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