Here at UK Business Loan, we provide expert advice to business owners all over the UK. With over 120 lenders on our lender panel to compare with, we can provide both secured and unsecured business loans from £1000 to 20 Million for your business. Get in touch today for free impartial expert advice and start your application now.

Secured Business Loan

A secured business loan, also known as asset based lending, is a loan taken out for your business using secured business assets to secure commercial borrowing. This can be a commercial property, business inventory or even your personal property such as your home. Other types of loan are based on proven cash flow from the business however, a secured business loan can be used if your business is not able to show positive cash flow. Your loan is instead based on the collateral you provide, if you default on monthly payments, the lender is able to take their payment from your assets. This could mean the sale of your assets in order to make your repayments.

Some secured commercial finance is regulated by the FCA (Financial Conduct Authority). Finance becomes regulated when a business is securing a loan against property such as their personal home, the loan is then regulated by the FCA under residential mortgage rules. This protects you, the borrower from any harm caused by bad conduct in the financial services you receive.

Unsecured Business Loan

An unsecured business loan is a loan for your business that does not require anything to be used as business collateral to secure your loan. Lenders will generally lend between £500 - £1,000,000 for business purposes such as refurbishment, tax and working capital. To take out an unsecured business loan, the lender will look at your business’ revenue and cash flow to determine if you qualify for a loan.

Below is a table that outlines some of the pros and cons of taking out a secured business loan:

A secured business loan can be used for a variety of reasons, an asset based loan is a great option for when your business does not currently have good cash flow. Often if there is a reason your business has struggled such as damage to your business which has caused it to close, an asset based loan may be an ideal option. This type of loan can also work for business’ that thrive in certain seasons as they may not have proof of cash flow but need a loan for reasons such as refurbishment or set up costs.

Do I qualify for a business loan?

To qualify for a secured business loan in the UK, you must meet the below eligibility –

·       You must be over 18 years of age

·       A UK resident

·       You must be listed as a shareholding director for the business you are requesting the loan for

Other considerations when applying for your loan may include your business’ annual revenue, the age of your company, your net operating income (to determine if you are able to make the monthly repayments) and your collateral. When applying for a secured business loan, you will need to identify the assets you intend to use as business collateral.

How much can I borrow?

Lenders will generally offer between £1,000 and £8,000,000 for a secured business loan. The amount you can loan for your business will depend on the value of your assets, loans are generally between 50-70% of the value of your chosen asset/assets. Fill out a UK Business Loan online application form to receive a more accurate quote on your loan.

When do I have to pay it back by?

The length of time you have to pay back your loan is dependent on the amount of money you want to borrow and the length of time you want to borrow it for. Lenders are typically flexible when it comes to asset based lending repayments however, you are likely to be given between 0-60 months to make your repayment.

Can I get a business loan if I’m self-employed?

Secured small business finance is available through a secures business loan, applying for a secured loan self employed can be a harder and longer process however, it is possible. A secured loan can use used as a self-employed person if you do not necessarily have good credit history or cash flow, your loan can instead be secured by a personal asset such as your home. If you own a property with sufficient equity to be used as collateral for your secured small business finance you should be eligible for a secured business loan.

Do I need good credit?

Unlike unsecured business loans, you do not need good credit history to take out this type of business loan. As you are offering assets as collateral, the lender is taking less of a risk as they are more confident in the knowledge that they can seize the assets if repayments are not made.

 Does a business loan affect my personal credit score?

Your personal credit should not be affected if your loan is taken out against your limited (Ltd.) company. Any debt acquired is the company’s liability and should not affect your personal credit in most cases.

Is a secured loan easier to get than an unsecured loan?

The table below outlines some of the differences between a secured loan and an unsecured loan.

A secured business loan is accessible to more business owners as you can take out a loan without providing proof of cash flow and good credit scores. A secured loan can be a lifeline for a business that needs help with refurbishment, tax, working capital and more.

When should I apply?

Contact UK Business Loan now to register your interest and receive expert impartial advice from our experts. Our experts are happy to provide advice on the best and most beneficial loan for you and your business. Fill out our quick and easy 4-step online application form today, just enter your personal information and how much you would like to borrow to receive an answer from one of our trusted lenders. Free to apply and does not affect your personal credit score. Act now to find out how a secured business loan can benefit your business!