A secured business loan allows businesses to access funds by providing an asset as security for the loan. This form of lending is also known as asset-backed lending. By using a commercial asset, such as property, equipment or land, as security against your loan, you could access a high value secured business loan from £5,000 to £2 million+. This security is essentially used to lower the risk for lenders, therefore interest rates and repayment terms tend to be very competitive. But in the event your business is unable to repay the loan, the asset will be sold to recover the funds.
The benefits of secured business loans: It is often cheaper to repay a secured business loan than an unsecured business loan as the repayments and interest rates are generally lower. Lenders offer greater flexibility with their funding arrangements and can offer generous repayment terms of up to 10 years.
• Larger loan amounts from £5,000 up to £2m+
• You could get up to 100% of the value of the asset.
• Longer periods to repay up to 10 years.
• Lower interest rates and smaller repayments.
• Works with poor or bad credit history.
• Medium to long term funding solution.
Most lenders will generally consider a wide variety of tangible and intangible business assets to secure the loan against. Some of the most common assets include the following:
• Machinery & Equipment.
• Personal assets
There are many advantages to using a secured business loan over unsecured lending such as better rates. However, as with all financial products, it does come with its own risks.
When compared with other types of business loans, lenders of secured business loans typically offer larger loan amounts. The amount available to borrow is usually determined by the value of the collateral used as security against your loan. In some cases, it is possible to borrow up to 100% of the value of the asset.
Managing the loan is made easier, as repayment terms tend to be lengthy. Business owners are therefore able to concentrate on growing their businesses whilst budgeting effectively over a long period of time.
Secured business loans often have a significantly lower APR (annual percentage rate) than unsecured business loans, as offering business or personal asset security minimises the risk for the lender.
Although credit history and credit ratings still matter, businesses with poor credit history can still qualify for this type of finance as the asset will be used as security against the loan.
It can be great for start-up businesses, businesses yet to submit annual accounts, or businesses with no credit history. You can then use your company assets to lend against.
An unsecured business loan offers a straightforward funding solution for UK businesses; you could borrow up to £500,000 or more without having to secure the loan against company assets, such as property, land or equipment. A business loan without security provides a flexible source of funding for businesses that lack assets or do not want to secure them against a loan. You can access finance quickly – often within a couple of hours – and simply pay it back within an agreed timeframe.
If you need a quick injection of cash for your business without offering the security of an asset, an unsecured business loan could offer the fast, flexible and easy funding solution you’ve been looking for.
• Borrow £1,000 up to £500,000 +
• Does not require any asset security.
• Flexible repayment terms from 1 month to 5 years +
• Minimal paperwork required.
• Funds can be released quickly after approval.
• Short to medium term lending solution.
An unsecured business loan provides your business with upfront capital without requiring security. Typically, you repay the loan in monthly or quarterly instalments over a fixed period. There is a wide selection of unsecured funding products that offer flexible terms.
Unsecured business loans offer great advantages for businesses operating in the UK. Both well-established businesses and relatively new ventures can enjoy a number of significant benefits.
With an unsecured business loan, funds can be made available faster than other types of business loans. As assets are not required as security, they offer a highly accessible source of funding for business owners.
Whether you’re looking to invest in new equipment, expand your product range, fund training opportunities for your staff or break into new markets in the UK or overseas, there are no limits to how you use this type of business loan.
As you do not require an asset or collateral as security for an unsecured business loan, your loan could be agreed within a matter of hours. Depending on your circumstances, you could qualify for an unsecured loan of up to £500,000 or more.
Our alternative business funding providers can offer you a highly flexible finance arrangement; many offer fixed repayment schedules with no hidden fees and interest rates are agreed upfront. Loans can be repaid over a short or medium term, typically between 1 month to 5 years.