Secured Business Loans
Acceptance within 24 hours
Quick and easy application
Unrestricted use of funds
Terms from 6 months to 10 years
What is a Secured Business Loan?
A secured business loan, or secured commercial loan, is where a business’s property or owners residential/B2L property is used as collateral. Therefore, the amount of money a business can loan usually depends on the value of the assets secured on. The more equity you have in the selected property the more you will be able to borrow.
Examples of assets include; Residential, Commercial, Semi Commercial and B2L properties. Secured business loans often have better interest rates than unsecured business loans due to them being less of a risk for the lender.
For secured business loans in the UK, Aurora Capital’s interest rates start from 4.95% per annum. Read on to find out if you are eligible for secured business funding.
Am I eligible for a Secured Business Loan?
UK homeowners that are a director of a limited business are eligible for secured business finance. While some lenders may take overseas property into account, unfortunately we can’t at this moment in time.
It’s a good idea to be fully prepared for your application. Knowing exactly what you need the money for should stand you in good stead when it comes to approaching the lender. However, due to the flexibility of our lenders you do not need to show a business plan, just a brief on what the money will be used for.
Once accepted, the process for a secured business loan can be relatively quick, with the whole process taking around 3-4 weeks. In comparison to a bank where the same process can take around 3 months, we will always strive to complete within a month.
Understanding the Difference Between Tier 1 and Tier 2 Lenders
When it comes to assessing your eligibility for a secured business loan, understanding which tier you fall into can be helpful. There are big differences between tier 1 and tier 2 lenders, and this will impact if and how you’ll receive finance.
Key differences include:
- Residential and Commercial Assets – Tier 1 lenders can only secure against residential and B2L residential property, whereas tier 2 lenders can secure on commercial as well.
- Trading time and affordability – Tier 1 lenders require your business to have traded for a period of time and there are affordability checks in place during assessment. Tier 2 lenders, on the other hand, do not have these requirements and may offer a deal if a security is present.
- Interest rates – Tier 1 lenders have lower interest rate compared to the 19% for tier 2.
- LTV – Tier 1 lenders have a maximum LTV of 75%. Tier 2, on the other hand, have a maximum of 70%.
- Loan amount – Tier 1 lenders can offer a minimum loan of £25,000 compared to a minimum loan of £5,000 for tier 2 lenders.
It’s essential you read these differences and know where your business sits before applying. Depending on which category/tier you fall in, you may be offered different levels of finance.
Do you offer Secured Business Funding to Start-Ups?
Start-up businesses that meet the criteria mentioned are welcome to apply for a loan of this type, in fact secured start-up business loans are often ideal for companies that are yet to build up a credit history and with assets to secure the loan against.
How to Apply
Fill in the above form or contact us
Tell us how much you’re looking for and you intentions with the funds. No bulky business plans or documents are required.
We find an offer
We search the market for the most competitive offers. A dedicated account manager will then provide support thoughout.
You’ll receive a personalised quote within just 24 hours. We currently have an 85% acceptance rate.
The money can be in your account within a matter of days.
What are the benefits of taking out Secured Business Loans?
There are many advantages of secured business loans over unsecured alternatives, whether you are a start-up business or established entity. Firstly, it will often work out cheaper due to the reduced risk to the lender; with a secured loan usually comes a considerably lower APR (annual percentage rate).
With that security, there’s scope to borrow more money than would be available with unsecured alternatives. Borrowing is also allowed over a longer term, thus reducing your monthly repayments and making those repayments easier to digest.
When it comes to bad credit, secured lenders can be more lenient when there was a fair reason for past credit issues, therefore an application for a secured commercial loan may be more likely to be accepted.
Can a business loan be secured by residential property?
Yes, this type of business loan can be secured against property, including residential property.
One of benefits this brings about is a major one we’ve covered; the potentially larger loan amount made available since the funds are usually based off the value of the asset used as security, which in this case is a property.
What is a business loan secured against?
A lot of companies who take out a secured business loan secure their loan against their commercial or, as mentioned, even residential property. Other assets that can be secured against are items with high value, including expensive equipment and machinery or vehicles which the business cannot run properly without.
The reason lenders do this is to ensure they have security and can cover themselves should you fail to make your loan repayments. If this were to happen, lenders are reassured, knowing they have a physical asset to take back and recover their finances.
Additionally, you can secure against more than one asset; if this is the case, you may be able to apply for more finance. For this reason, secured loan applications can require less information, and you may not need a personal guarantee or a credit check in order to qualify for the loan.
So, as long as you have assets worth securing against and you fit the other relevant criteria, this type of loan could be suitable for you. One of the most appealing things about secured business loans is that they are not specific to one sector; many businesses have different types of machinery, vehicles and other equipment that can be secured against, allowing you to take out a loan to use for other business needs.
Secure a business loan with Aurora Capital. For more details, applications or loan amounts, call us on 01371 870815 or email us at firstname.lastname@example.org.
Don’t want to be secured against your assets? Look into our unsecured business loans instead.