Compare Secured Business Loans

  • Secured loans are available to a wide range of commercial borrowers
  • This type of loan is secured against an asset owned by the borrower's business
  • Below you can compare secured loan offerings from some of the UK’s leading business finance providers

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Information written by Tim Leonard Last updated on 06 May 2022.

What is a secured business loan?

A secured business loan is a type of loan that a company can apply for using its assets as collateral. If the business defaults on its loan repayments, the lender can then claim ownership of, and sell, the assets used as security instead. Because of this effective guarantee, it’s often possible to borrow more or obtain a lower interest rate with business loans secured against property than with an unsecured business loan where security isn’t required.

The way that they work means that secured business loans might also be referred to as asset-backed loans or asset-backed finance. Sometimes they’ll also be called secured small business loans.

Types of secured business loans

There are various types of secured business loans available, including:

  • Term loans - secured business term loans can usually be set for the short, medium or long term. Repayments are made each month, so that the loan is gradually paid off over the entire term.
  • Interest-only loans - this type of business loan will be fixed for a set amount of years, but in that time your monthly repayments will only ever pay off the interest. This keeps repayments low, but at the end of the term you’ll either need a way to pay off the original loan amount or will need to refinance the capital amount to a new loan.
  • Bridging loans - these secured business loans are designed for the short term to ’bridge’ financial gaps. A bridging loan is usually paid off via a single ‘bullet’ payment covering both the capital and interest at the end of the term.

» COMPARE: Business bridging loans

What types of collateral can be used to secure against the loan?

Most lenders will accept tangible or hard assets such as property, land, equipment, or machinery as security against a secured business loan. It may be possible to use cash as collateral, although the conditions of cash secured business loans are often different compared to a business loan secured on property.

Some specialist lenders may also accept intangible or soft assets such as intellectual property, trademarks or patents as collateral, where valuing such assets can prove much harder.

Lenders are also usually willing to accept a combination of different assets as security, which could include assets that you own personally, like your home, car, or shares.

Features of a secured business loan

Most secured business loans in the UK can be tailored to your company’s needs. This means you only need to borrow the amount that you want (subject to any minimum loan amounts a lender might specify). The maximum you can borrow will depend on the value of the assets that you provide as security. You can also choose between a short-term loan or a medium to long-term loan.

» COMPARE: Short-term business loans

If a lender agrees to advance you a loan, there are usually no restrictions on how the funds can be spent. However, you must make the repayments in line with the loan agreement, or else risk losing the assets used as collateral if you fail to repay. Business loans secured against property generally have fixed interest rates, providing certainty over repayment amounts and when they need to be made.

What are the advantages of a secured business loan?

  • Will often offer lower interest rates than like-for-like unsecured loans.
  • Can allow large loan amounts if sufficient assets are available as collateral.
  • Can usually be repaid across a long period of time.
  • Could be available even if your business has a bad credit rating or poor trading history.
  • May be available to start-up businesses with no trading history.

What are the disadvantages of a secured business loan?

  • Your business must have suitable assets.
  • These assets are at risk of being lost if repayments aren’t made.
  • Can take longer to arrange, due to involvement of assets and the need to make appropriate legal arrangements.

How to get a secured business loan

Different lenders will usually have different requirements, but generally a business will need to have been registered to trade in the UK for a minimum of three months, and have a suitable asset or assets for security.

If your business is set up as a limited company or a limited liability partnership, a lender may also require a ‘personal guarantee’ from yourself as a director of the company. This involves you providing personal assets, such as your home or valuable personal possessions, as additional security that the lender can call on if repayments aren’t made.

How to apply for a secured business loan

The process of applying for a secured business loan will usually involve a consultation with the lender to discuss your borrowing requirements and eligibility. Typically questions will surround your line of business, your business turnover and trading history, and what you intend to do with the funds.

The lender will look at the credit history of your business, but even if this is poor, or you have a low turnover or little in the way of trading history, it doesn’t necessarily mean you can’t get a secured business loan; instead, a greater onus is likely to be placed on the value and merit of your assets as security.

A valuation of your assets will help the lender confirm whether they are prepared to lend to you and on what terms. If they are, and you’re happy with the loan being offered, the legal documents must be signed before the funds are released.

What’s the difference between a secured business loan and an unsecured business loan?

The main difference is that a secured business loan requires assets as security, while an unsecured business loan does not. Therefore the turnover of your company, its trading history and credit rating will be far more important considerations to a lender if you want an unsecured loan, where there is no collateral as a guarantee.

A secured business loan will usually have a lower interest rate than a comparable unsecured loan because having assets as security reduces the risk of a lender not getting its money back. Lenders of asset-backed loans are also often more willing to lend larger amounts and offer longer terms because of the security too; with an unsecured business loan, the maximum that can be borrowed will often depend on the turnover of your business.

With assets part of the equation, the process of applying for a secured business loan is usually lengthier and more complex than applying for an unsecured loan. Secured business loans also often have upfront fees to cover the additional expense of valuing and then making legal arrangements in respect of the assets.

» COMPARE: Unsecured business loans

How to get a secured business loan with bad credit

As a secured business loan provider typically places more importance on the assets that are being used as security than your business’ credit history, an application is unlikely to be automatically rejected on the basis of bad credit.

However, a lender may want to see proof that your business is on a steady financial footing before it is willing to approve a loan for a company with bad credit.

» MORE: Learn about business credit scores

How much can I borrow?

The amount that you can borrow using a secured business loan will usually depend on the value of the assets put forward as security. Most lenders are usually prepared to offer loan amounts up to the full value of the collateral.

What fees and charges are involved in a secured business loan?

There may be higher fees with a secured business loan than other types of loan because of the additional charges that come with assessing, valuing and then making legal arrangements for the assets being used as collateral. These are likely to be covered within an arrangement, booking or origination fee.

Some lenders might have a bank or wire transfer fee for paying the money into your bank account, and broker fees may be payable if one is involved with the transaction.

You should usually expect a penalty charge if you make late payments, and there may also be early repayment charges if you want to settle your loan early.

What rates are available?

The interest rate you’ll pay on business loans secured against property will usually depend on how much you’re borrowing, the term over which it will be paid back, and the size of the loan in relation to the value of the assets used as security. The smaller the loan as a percentage of the assets, the lower the rate of interest may be.

Poor credit may make it more difficult to secure the lowest rates that the best secured business loans offer, while start-up firms and those in a line of business deemed more risky by lenders may face a similar challenge.

How long does it take to receive funds?

The time involved with verifying assets and meeting legal requirements means arranging a secured business loan usually takes longer than arranging an unsecured business loan. Of course, timescales will vary from lender to lender, but two to three weeks is a benchmark that many aim to meet.

Are my business assets at risk?

The nature of secured business loans means that the assets you put forward could be lost if you don’t make the necessary loan repayments when you should. If you’re struggling to make payments on a loan you already have, talk to your lender as soon as you can.

What are the alternatives to secured business loans?

If you’re unwilling to use business assets as security or don’t have suitable assets available, there are various alternatives to a secured business loan you might want to consider. These could include unsecured business loans, credit cards, credit lines and business overdrafts, particularly when borrowing smaller sums.

» COMPARE: Business credit lines

Another potential option is invoice financing, where businesses can borrow funds against invoices they are waiting for customers to pay.

» COMPARE: Invoice financing

Or if your business is in need of new equipment, machinery or vehicles, asset financing can provide the opportunity to spread the cost of purchasing or hiring such assets.

» COMPARE: Asset financing

How does NerdWallet’s secured business loans comparison work?

Finding the right secured business loan for your company is easy with our comparison table. Simply select the criteria you’d like to sort the lenders by from the dropdown list and the table will reorder itself automatically.

Lenders can be sorted according to the minimum or maximum amounts they will lend, the minimum or maximum terms they offer, or the minimum turnover required of a company before they are willing to lend – our featured lenders are the default list.

Additional details about a specific loan, including eligibility criteria, can be found behind the ‘More info’ button. And even greater detail can be seen if you click ‘See Deal’.

Business Unsecured Loans FAQ

Is a small business loan secured or unsecured?

If you’re searching for a small business loan, you’ll find that both secured and unsecured options are available. Which is better for you will depend on your business needs, circumstances and whether you have suitable assets to back a secured business loan.

» COMPARE: Business loans

Are secured loans easier to get than unsecured loans?

This will usually depend on your business circumstances. If your company has poor credit, an underwhelming trading history or low turnover, it might be easier to get a secured business loan. However, if you don’t have assets suited to getting a secured business loan, an unsecured loan may be your only option.

Can I get a business loan without security?

Yes, an unsecured business loan can be arranged without security. Instead, lenders will typically look at the credit standing, trading history and turnover of your business to decide whether you’d be able to meet the repayments.

Do secured business loans hurt your credit?

If you miss a repayment or default on your secured business loan, this will have a negative impact on your business’ credit score.

» MORE: Improve your business credit rating

Will I need a personal guarantee?

You may be asked to provide a personal guarantee as added security if your business operates as a limited company or a limited liability partnership. Sometimes, a personal guarantee might also be requested by a lender if the assets put forward for a secured business loan aren’t of a high enough value to cover the loan amount you want.

What if I don't have any business assets?

If your company doesn’t have assets, it may still be possible to get a secured business loan using only a personal guarantee as security. Alternatively, you may want to consider an unsecured business loan.

About the author:

Tim draws on 20 years’ experience at Moneyfacts, Virgin Money and Future to pen articles that always put consumers’ interests first. He has particular expertise in mortgages, pensions and savings. Read more

Compare Secured Business Loans

4 products found
  • Capify Secured Business Loans logo

    Capify Secured Business Loans

    • Secured lending for UK SMEs since 2008
    • Can be used for any business purpose
    • Check your eligibility for a secured loan in 60 seconds
    • Minimum Turnover
      £120,000 p.a.
    • Available Amounts
      £5,000 to £500,000
    • Available Terms
      3 to 18 months
  • Funding Xchange Secured Business Loans logo
    Broker

    Funding Xchange Secured Business Loans

    • Discover instant & personalised Secured Loan offers in just 3 minutes
    • Borrow against your company's assets and get the capital your business needs
    • One search compares Secured with Unsecured lending solutions to find the best for you
    • Minimum Turnover
      £100,000 p.a.
    • Available Amounts
      £25,000 to £5,000,000
    • Available Terms
      6 months to 25 years
  • Swoop Funding Secured Business Loans logo
    Broker

    Swoop Funding Secured Business Loans

    • Use business assets including property, vehicles, machinery, debtors etc. to secure flexible funding for your business
    • Can be used for any business reason
    • Competitive rates compared to unsecured finance options
    • Minimum Turnover
      £50,000 p.a.
    • Available Amounts
      £20,000 to £2,000,000
    • Available Terms
      2 months to 10 years
  • JD Capital Finance Secured Business Loans logo
    Broker

    JD Capital Finance Secured Business Loans

    • Funding solution for business finance, which will be secured against an asset (typically property)
    • Funds can be used for any commercial needs
    • This product works in conjunction with commercial mortgages and bridging loans
    • Minimum Turnover
      £100,000 p.a.
    • Available Amounts
      £30,000 to £1,000,000
    • Available Terms
      6 months to 10 years
  • Suppliers that don't offer Secured Business Loans but may offer suitable alternatives:

    • Nationwide Finance Business Finance logo

      Nationwide Finance Business Finance

      • Nationwide Finance help 35,000 businesses get finance each year
      • Direct funder - not a broker
      • Same day decision, funds within 24 hours
      • Minimum Turnover
        No minimum
      • Available Amounts
        £10,000 to £500,000
      • Available Terms
        1 to 5 years
    • Funding Circle logo

      Funding Circle

      • Your business must have a minimum of 2 years’ trading history
      • A leading UK platform for small business loans
      • Simple online application and decisions in as little as 5 hours
      • Rates from 3.9% per year - No early settlement fees
      • Minimum Turnover
        £16,700 p.a.
      • Available Amounts
        £10,000 to £500,000
      • Available Terms
        2 to 6 years
    • Puzzle Funding logo
      Broker

      Puzzle Funding

      • YOUR BUSINESS MUST HAVE A MINIMUM OF 6 MONTHS’ TRADING HISTORY
      • Free service matches your business with over 100 lenders in seconds
      • Apply in 3 minutes and get funds in as little as 1 hour
      • High acceptance rate
      • Minimum Turnover
        £100,000 p.a.
      • Available Amounts
        £1,000 to £15,000,000
      • Available Terms
        1 month to 25 years
    • Fleximize logo

      Fleximize

      • Industry-leading flexibility - top-ups, repayment holidays, penalty-free early repayment, no set-up fees
      • Interest charged on reducing balance, not total loan amount - repay early and only pay for the time you had the loan
      • Apply online in five minutes, typically get a decision in 24 to 48 hours, receive funds the same day
      • Minimum Turnover
        £60,000 p.a.
      • Available Amounts
        £5,000 to £500,000
      • Available Terms
        3 months to 4 years
    • iwoca logo

      iwoca

      • Flexible finance for small businesses from £1000 to £200,000
      • No long term commitments and flexible repayments to fit for your business
      • Apply online in minutes for a decision (some decisions may take up to 24 hours)
      • Minimum Turnover
        £50,000 p.a.
      • Available Amounts
        £1,000 to £200,000
      • Available Terms
        up to 12 months
    • Cubefunder logo

      Cubefunder

      • Only available to Limited Companies in England and Wales with 3+ months' trading
      • Fast and Flexible funding from £5,000 - £100,000 for Limited Companies within England and Wales
      • No penalties for Late payments or Early repayment
      • Apply and receive funds within 48 hours
      • Minimum Turnover
        £50,000 p.a.
      • Available Amounts
        £5,000 to £100,000
      • Available Terms
        3 months to 1 year
    • 365 Business Finance logo

      365 Business Finance

      • Your business must process credit and debit card transactions to apply for this product
      • A flexible business funding alternative
      • Cash advanced against card transactions
      • Pay back an affordable % of your card transactions
      • Minimum Turnover
        £10,000+ card transactions per month
      • Available Amounts
        £10,000 to £300,000
      • Available Terms
        4 to 18 months

Our comparison service features a selection of providers from whom we receive commission. This table is initially ordered according to our commercial arrangements. You can use the options above the table to order it according to various criteria.

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