Secured business loans are higher value loans that are secured by the borrower’s assets. These loans are suitable for businesses that own assets such as commercial property, vehicles, and machinery.

Typical uses for a secured business loan could include funding for the purchase of commercial property, office refurbishment, company expansion, or new machinery. Using existing assets as security reduces the risk to the lender, which could increase your eligibility for a loan. It could also mean lenders are willing to offer a higher loan amount or a lower rate of interest.

The amount you can borrow could be dependent upon the value of the assets you’re putting up as security. You can use any number of business assets, including:

• Commercial property
• Vehicles
• Land
• Equipment
• Fittings and fixtures

But bear in mind that if you miss repayments then your lender can seize your assets as part of any debt recovery action.

• Lenders usually class secured loans a lower risk as the asset is an assurance of repayment. This means lenders will be more confident in lending to your business and may be more flexible with their terms. You may get more competitive interest rates and longer repayment terms than with an unsecured loan.
• Businesses can typically borrow more with a secured business loan depending on the value of the asset it is being secured against. The more assets you put forward as security the more you may be eligible to borrow.

• Due to the loan being secured against assets, failure of repayment the asset will be seized.
• This form of loan can take longer to process than an unsecured loan as valuations need to take place against the asset as well as other legal checks.

A private medical company is looking to expand. It currently offers a range of services, including physiotherapy, personal training, acupuncture, massages, and sports therapy. It also has an animal veterinary side of the business. The staff are all self-employed, highly trained and experienced.

As the business was growing, it needed to work from larger premises. After getting in touch with the team at Think Business Loans, it was agreed that a secured business loan would be the best option in these circumstances.

Once a suitable lender was found and had finished with their valuations, the client was accepted for a £250,000 loan. With this, they were able to buy a new building that was four times the size of the original one. They have since been able to hire more staff and create a better experience for customers.

Although both can usually be used for any business purpose, there are a number of differences between secured business loans and unsecured business loans. The type of loan you can take out will depend upon the amount you need to borrow and your current circumstances. The information held in your business credit file will also affect the type of loan and the terms you’re offered.

If your business has no suitable assets to use as security, you might be able to secure a loan with a personal guarantee. In this instance, a company director will offer a personal asset – usually a property – as security on the loan. Although this is a legitimate way to secure business finance, it can be risky as you could lose your property if the business becomes insolvent.

If you need money for expansion or new equipment, a secured business loan might be a good option as it gives you access to higher loan amounts. It could also be a useful option if your business has a low credit rating as putting up assets as security will reduce the risk to the lender and increase your chance of acceptance.

To find out if a secured loan is the right option for your business, give the team at Think Business Loans a call on 0203 880 9880. We’ll compare a range of solutions to help you find finance that fits your business.