Apply For a UK Secured Business Loan To Help You
It takes minutes to apply, there’s no effect on your credit score and can obtain decisions within 24 hours.
Our lending partners
What is a Secured Business Loan?
A secured business loan, also known as a secured commercial loan, is where a business’s property or its owners residential/B2L property is used as collateral against the loan. The amount of money a business can borrow will therefore usually depend on the value and equity available of these assets. In short, the more equity you have in the selected property, the more you will be able to borrow.
Examples of assets include:
- Residential properties
- Commercial properties
- Semi-commercial properties
- B2L properties
Please note, we do not take overseas property into account at Aurora Capital.
You can use a secured business loan for a range of business purposes, be it to buy new equipment, invest in assets to help your business grow, or to consolidate other forms of finance and debt you’ve accrued at a more competitive rate.
With a secured business loan, risk is significantly reduced for the lender, which therefore increases your chances of getting approved. This allows you to borrow more money for a longer term, thus reducing your monthly repayments and making those repayments easier to digest.
A secured business loan allows you to borrow up to £2 million across a term up to 15 years, but ultimately how much you can borrow depends on your assets. If you’re a small business and don’t have any property to put up as collateral, you won’t be eligible for a secured business loan; however, if you own property and you’re happy for your property to be put up as security against the loan, there’s a good chance you’ll get approved for a secured loan, even if you’re relatively new business.
You do need to keep in mind that your assets will be at risk if you default on your payments.
Don’t want to be secured against your assets? Look into our unsecured business loans instead.
How do secured business loans work?
Secured loans are one of the simplest forms of borrowing available to businesses. First, you need to make sure you’re comfortable with putting your commercial property (or assets) up as collateral.
Based on the value of the property or assets, you can determine how much you want to borrow. For example, you might use your house equity as collateral and borrow £100,000 over the course of five years. The lender may offer you an annual interest rate totalling 6%. This brings your total loan amount to £130,000 payable over 60 months. This means you’ll need to pay £2,166 per month.
Paying the loan off early may incur early repayment penalties from the lender depending on the deal you agree to.
Key features and benefits of secured business loans
- Suitability: Businesses looking to either raise a large amount of debt or for younger businesses yet to prepare a set of financial accounts.
- Purpose: Working capital, debt consolidation, growth, MBI, MBO, stock and more.
- Amount: Loans ranging from £25k – £2m, depending on the lender. Our lenders will be able to offer up to 75% LTV.
- Term: Up to 15 years. Some lenders offer interest only terms.
- Cost: Rates starting from 10% per annum, depending on age of business, affordability and LTV.
- Security: Our lenders can secure against a UK residential or commercial property.
How do you qualify for a secured business loan?
Any UK homeowners or asset owners that are directors of a limited business are eligible for secured business finance. This includes new and start-up businesses that don’t have a long credit history but that have assets or property. You need to:
- Be a UK-based company
- Own at least one property with enough equity available
When it comes to submitting a proposal, knowing exactly what you need the money for should stand you in good stead and will give you a better chance of being accepted by the lender. You will not be expected to show an extensive business plan; simply a brief on how the money will be used.
Required information for secured business loan proposal submission
- Full name of the business
- Details of all guarantors
- Permission to perform personal searches
- Amount required
- The term of the borrowing
- The reason funds are required
- Details of the security property (including full address, approximate value and details of any existing charges)
Once accepted, the process for a secured business loan will likely take around 3-6 weeks.
Secured business loans: FAQs
How much funding can I get with a secured business loan?
Typically you can borrow up to 75% Loan to Value, however this will depend on the type of property you are using as collateral. For example, if you have a property worth £500k with a £200k mortgage, the maximum you can borrow would be £175k (£500k x 75% = £375k – £200k = £175k). Lenders will likely be able to offer more when securing against a residential property over a commercial premises or land. Secured business loans can range from £25k – £2m.
What is a secured business loan secured against?
A lot of companies who take out a secured business loan choose to secure against their commercial or, as mentioned, even residential property. Other assets that can be secured against are buy-to-Let properties or even semi commercial properties.
It’s possible to secure against a property with an existing mortgage.
You can also secure against more than one asset if you choose. If this is the case, you may be able to apply for more finance.
What is a legal charge?
If you’re securing the loan against a property with an existing mortgage, you may be subject to a legal charge. This means if you fail to meet your repayments, the lender can sell your property to recover what you owe. That being said, consent may be required from the original lender, i.e., the mortgage provider, meaning the lending process can take a while and you may have to wait longer to receive your money.
What is an equitable charge?
Where you have an existing mortgage and fail to meet repayments, to avoid the legal charge, the loan provider may put an equitable charge in place. This means they don’t need consent from the original lender, but they don’t have power of sale like with a legal charge. In this instance, the lender has security, though, and can approve your loan faster.
How do I find a secured business loan lender?
Aurora Capital can partner with you and put you in touch with a lender who will be able to take care of your requirements. There are lots of lenders offering secured business loans, but many will have different terms and processes. Our experts can help you throughout the process and provide any guidance you need on repayment terms, loan collateral and credit risk.
Lenders benefit from offering secured business loans as they can ensure they have security. With your assets being secured, the lender can cover themselves should you fail to make your loan repayments. This reassurance for lenders that they have a physical asset to take back and use to recover their finances means that you are more likely to be accepted for these loans and receive better terms. For further guidance on how this works, you can get in touch with our specialists.
Do you offer secured business loans to start-ups?
Start-up businesses that meet the criteria we have previously 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, but have a good amount of collateral to secure the loan against.
What is the process for secured business loans, and how long does it take?
If we can issue an acceptance, we will send out a property questionnaire to complete. On receipt of this completed questionnaire, we will require the legal fees and, if applicable, valuation fees to be paid. Once we have received the fees we will contact solicitors, book the valuation and raise loan paperwork for signature.
The whole process typically takes around 4-6 weeks depending on how quickly the valuation can be booked in, as well as how quickly solicitors can complete the legal documents.
How long does it take to release the funds for a secured business loan?
Once all conditions have been satisfied and we have completed our final checks, we can release the funds within 24 hours.
What locations do you accept security in?
We accept security property throughout the whole of Great Britain (England, Scotland, and Wales). Unfortunately, we cannot accept properties in N. Ireland.
What charge can you accept?
Our lenders can look to take anything from an equitable charge to a 1st, 2nd or 3rd charge dependent on the available equity.
Are secured loans easier to get?
At Aurora Capital, we do our best to ensure every business loan process is as simple as possible. However, typically lenders will be more receptive to secured business loans as there is more security for them in terms of repayment. Additionally, it may be the case that lenders offer more funds if you are securing on a residential property rather than a commercial property. For more information about why this is, you can contact our team directly on 020 3355 7462.
Is a secured business loan the best loan for me?
There are a number of different options available to businesses looking for funding. A secured business loan will likely be the right option for you if:
- You are a UK homeowner or asset owner
- You are also a director of a limited business
- You are happy to secure against your property or other assets
- An unsecured loan is not suitable for your business
What are the benefits of a secured business loan?
There are a number of benefits that secured business loans have over other types of loans, with the first being that borrowing can be extended over a mid to long term basis, again helping to make the loan more affordable in the long run.
Most commercial loan lenders and banks will offer secured finance to anyone who is a director and who owns property, so even if your credit history isn’t the best, you can still get approved. At Aurora Capital, we work with a range of different lenders, including those that lend to businesses with adverse credit, so don’t be put off if your credit rating isn’t great. When you apply online with us, it won’t affect your credit score.
The final notable benefit of a secured business loan over other types of borrowing is that you can borrow large amounts; so whether you need to purchase a company vehicle to expand your operations, acquire funding to hire a new team member, or replace/upgrade an old piece of equipment, you can get what you need with a secured loan.
What are the alternatives to secured loans?
Of course, it is not required of you to secure against property or assets to get a quality business loan with great terms. At Aurora Capital, we help businesses get unsecured loans, as well as merchant cash advances, recovery loans, and a whole host of other fund types. However you’re looking to raise funds for your business, you can rest assured you’ll find the best deals, in the quickest time, with us.
Securing business funding: How it works
We understand that timing is key when you’re looking to find funding options for your business,
so our process is as quick and as streamlined as possible.
Apply online in minutes
We cater to any sized business, so to apply for business funding, we only need you to share basic information about your company. Your application will take a few minutes, and our experts are always happy to assist with any questions you have about specific loan types or alternative finance options.
Get matched in hours
Our LendTech technology will compare our trusted panel of lenders and match you with your most suitable finance option. Each business funding option is different, and we’ll help to make sure you’re fully clued up on the terms and conditions as well as indicative repayment details.
Get funded in days
One of our funding specialists will discuss the available options with you and guide you through the process from application to approval. Once approved, the funds can be deposited in a matter of hours.
Not sure what type of business funding is right for your company?
Aurora Capital is here to help. Navigate our range of alternative funding options to find out more.
Get your free, no obligation quote today!
Prefer to talk? Call us on 020 3355 7462