Secured business loans
Secured business loans are designed for businesses that own commercial property, vehicles, machinery or other qualifying business assets. They can also be used by directors who don’t want to offer a personal guarantee in order to secure funding.
Secured business loan advantages
Lower interest rates
Business loans that require security tend to be cheaper than unsecured loans and other types of finance. The risk of the lender losing their money is smaller because they can claim the lost funds through the sale of your asset if you don’t repay.
Larger sums
Larger amounts tend to be available through secured business finance; although it does depend, to a large extent on the value of your asset. You may be eligible to borrow up to 100% of the net value of the asset or assets you offer as security.
Longer repayment terms
The longer the loan term, the lower your monthly repayments are likely to be. This can benefit your business from a cash flow perspective, but it’s also important to consider the total loan cost. Your Funding Options by Tide expert can talk you through this.
Less focus on trading/credit history
Because your business assets act at the guarantee, the lender may be more flexible when looking at your trading and credit history.
For this reason, secured finance could be a viable option for startups that haven't been trading for long, or companies that don’t have a perfect credit rating.
How does Funding Options work?
Tell us how much you need
We’ll ask a few questions about your business and the reason for your loan.
Get quotes instantly
Our smart technology will compare quotes from up to 120+ lenders to help you find the ideal business loan.
Apply for a Business Loan 🎉
We'll be there to guide you through every step of the process.
Trusted by over 18,600 customers
What assets can I use for a secured business loan?
Range of asset types
Fortunately, the majority of lenders will accept a range of tangible and intangible assets as security, making secured business loans an accessible option for a variety of business sectors.
Property, land, and machinery
Common tangible business assets include, property, land, machinery, equipment, vehicles, accounts receivables.
Intangible assets
Intangible assets include trademarks, copyrights, intellectual property, licences and patents. You might be able to offer multiple assets or your own personal assets. Keep in mind that a personal guarantee may also be required.
How much can you afford to borrow?
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
Monthly payments
-
Monthly interest
-
Total interest
-
Length of loan
-
Total cost of loan
-
Financial product information
Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
How do secured business loans work?
A sum of money
If you’re eligible for secured finance the lender will agree to lend you a sum of money based on the value of the business asset (or assets) you’re using as security. The lender will also consider your business’ financial circumstances and needs. Secured business finance can take longer to arrange.
Several weeks
Depending on the lender and the complexity of your situation, the process could take up to several weeks. Your assets will undergo a valuation and if you’re offering a property as security it’s likely that the lender will place a legal charge on it.
Possible fixed interest rates
Most secured business loans come with fixed interest rates. Depending on your needs and eligibility, you may be able to opt for a short, medium or long-term secured business loan. Many lenders will lend up to 100% of the value of your asset.
Learn more about secured loans
Secured vs unsecured business loans
An unsecured business loan doesn't require you to offer business assets as security. However, the lender still needs to feel confident that you can repay in order to lend to your business, so they will look closely at its credit rating and trading history.
Unsecured business loans could suit businesses that don’t own assets, would prefer not to offer an asset as security, or those who need finance quickly.
Unlike a secured business loan – which is largely informed by the value of the asset offered as security – the amount you can borrow through an unsecured option will typically be a multiple of your annual business turnover.
Unsecured finance tends to be quicker to arrange because you don’t need to go through the asset valuation process. You’ll probably get the funds quicker but interest rates are usually higher.
By offering business assets as security, you’re reducing the level of risk from the point of view of the lender. In this sense, unsecured finance is seen as riskier which is why interest rates can be higher. With secured finance, you’re more likely to be able to borrow a larger amount over a longer period and at a lower interest rate.
Secured or unsecured, always consider the total cost of the loan. If you borrow funds at a low interest rate, bear in mind that costs can accumulate over the long term.
Secured business loans alternatives
Secured business loans aren’t for everyone. A startup, for instance, simply might not have the assets yet. If you’re unable or unwilling to get a secured business loan, there are many alternative financing options to explore, including:
Secured business loan disadvantages
Risk to business assets
You can’t get a secured business loan if you don’t have a business asset to use as security, or do but aren’t willing to offer it as security for a loan (for example, because you don’t want to risk losing it if you can’t meet the repayments). Remember: if you don’t repay your business loan the lender can sell the asset to recoup the costs.
Fees
It’s likely that you’ll have to pay upfront costs when taking out secured finance. For instance, if you’re using property as security, you may have to pay valuation fees and legal fees if the lender puts a legal charge on it. You will still have to meet the costs of valuation if your loan is declined or you are offered a smaller amount.
Not as fast
It can take longer to get a secured business loan because of the lender’s due diligence processes. It’s a good idea to have all your relevant business paperwork together when you apply, to avoid any unnecessary delays.
Are you ready to apply for a secured business loan?
You can use Funding Options to apply for a secured or unsecured business loan. The process is quick – you’ll typically receive a decision within 24 hours. Just tell us how much you need to borrow and what it's for, and we’ll compare 120+ lenders to match your business with the right finance options for its needs.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
