More from business loans
Last updated: 17 February, 2021
A secured business loans uses a businesses assets, such as residential or commercial property, to borrow money for a company.
It's a way to get access finance to fund business projects, or everyday business expenses.
Secured business loans work just like any other loan. You borrow the sum your business needs and pay it back over a set period of time, at a set interest rate.
There are several types of secured business loans, including:
Asset backed finance
Secured business bank loans
Peer to peer loans
Here's what you need to know to get the secured business loan that's right for your business:
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.
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.
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.
The cost a secured business loan depends on:
How much you need to borrow
How long you need to pay back the loan
The asset you are using during your application
Other more specialist types of secured business lending, for example asset finance, work slightly differently.
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
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.
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.
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.
It depends on your business assets and finances, with the lenders in this comparison offering loans up to £1,000,000.
This depends on the lender, as some ask directors to give a personal guarantee to support the loan application.
It is the interest rate lenders must give to at least 51% of businesses who apply for these loans.
Our comparison tables include providers we have commercial arrangements with. The number of listings in our tables can vary depending on the terms of those arrangements, as well as other market developments. They are all from lenders regulated by the Financial Conduct Authority (FCA). Here is more information about How our website works.
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