It is a way of using your business assets to borrow money for your company.

How do secured business loans work?

It depends on the type of loan you choose, but you usually choose:

  1. How much you need to borrow

  2. How long you need to pay back the loan

  3. The asset you are using during your application

Other more specialist types of secured business lending, for example asset finance, work slightly differently.

Pros and cons

  • May be able to borrow more

  • Longer loan terms available

  • Sometimes cheaper but not always

  • Puts your business assets at risk

  • Can take longer to get a loan

  • Need a suitable asset to apply

Secured loan illustration

Here is an example of how much a secured business loan could cost and the repayments your business would need to make:

  • You choose to borrow 100,000 using your business machinery as collateral

  • You choose a loan term of 10 years

  • Your application is accepted and your interest rate is 30% APR

  • Your monthly repayments would be 2,383.33

  • The total amount repayable would be 285,999.60

How to get the right secured business loan

  1. 1.

    What business assets you can use: You need to detail what you are using as collateral when you apply for a loan, and its value.

  2. 2.

    How much your business needs to borrow: Try not to borrow more than you need. How much you can borrow depends on the value of the asset you choose to use and your business finances.

  3. 3.

    How long you need to pay back the loan: Secured company loans last from just a few months up to 5 or 10 years and you can choose how long when you apply.

Some lenders offer loans without you having to use your business assets to back up your application, so check if an unsecured business loan could better suit your needs.

Understand the different types of finance

There are several types of secured business loans, including:

  • Asset backed finance

  • Secured business bank loans

  • Peer to peer loans

Check your business qualifies

Your business will have to meet the lending criteria to qualify for a secured commercial loan, which may include:

  • Your minimum business annual turnover

  • Your trading history

  • Your type of business

Before you apply, check your business meets all the criteria to avoid having your application turned down.

Look for the cheapest loan

Once you have a shortlist of loans that meet your needs, and your business will qualify for, you are ready to look for the cheapest deal.

You can use our comparison to check the latest secured business loan rates.

Secured business loans FAQs


What assets can I use to secure a loan?


This depends on the lender and type of finance you choose. Most secured business loans let you use a wide range of assets to support your application.


How much could my business borrow?


It depends on your business assets and finances, with the lenders in this comparison offering loans up to 1,000,000.


Do I have to give a personal guarantee?


This depends on the lender, as some ask directors to give a personal guarantee to support the loan application.


What does representative APR mean?


It is the interest rate lenders must give to at least 51% of businesses who apply for these loans.