Compare 'Secured Business Loans' in just a few clicks

Some of the most common assets used as collateral include:

• Residential properties
• Commercial properties
• Semi-commercial properties
• Buy-to-let properties

Please note that we do not accept overseas property as security at Aurora Capital.

It’s possible to secure against a property with an existing mortgage. In this instance, the mortgage will be the ‘first charge’ and the secured loan will be the ‘second charge’. This means if the property is repossessed, the mortgage will take preference and be repaid before the loan.

With a secured business loan, you can borrow between £25,000 and £2 million over a term of up to 15 years. However, the amount you can borrow ultimately depends on the equity in the property.

Typically, you can borrow up to 75% LTV (loan to value); however, this will depend on the type of property you use as collateral.

For example, if you have a property worth £500,000 with a £200,000 mortgage, the maximum you can borrow would be £175k (£500k x 75% = £375k – £200k = £175k).

To apply for a UK business loan, you need to:

1. Work out how much you need to borrow and what repayments you can afford.
2. Decide what asset you want to use as collateral.
3. Find and compare funding options with Aurora Capital today.
4. Apply for the right secured loan for your business.

Use our secured business loan calculator below to help you work out how much you can afford to borrow.

To be eligible for a secured loan, you will need to own a UK property to use as security. The property must have enough equity to cover the amount you want to borrow.

Other standard eligibility requirements for all business loans include:

• Being a UK resident with a business registered in the UK
• Having a clear purpose for the loan
• Have an open UK business bank account

Secured loans can be easier to get if you don’t have a good credit history because the security reduces the lender's risk. However, most lenders will still check your credit score as part of their application process.

When you apply for business finance with Aurora Capital, we can assess your eligibility within minutes without impacting your credit score.

Find out how to navigate the application process and maximise your eligibility chances here.

Before you apply for a secured business loan, you must weigh the pros and cons.

Pros of secured business loans

• They can be easier to get if you have a poor credit score
• You may be able to borrow more than with an unsecured loan
• Interest rates can be lower than unsecured business loans
• You may be able to borrow over a longer term, which can mean lower monthly repayments

Cons of secured business loans

• You need to have a suitable UK property to secure on
• Any asset you use as collateral will be at risk if you can’t keep up with your repayments
• The application process can take a lot longer than an unsecured loan
• There are often upfront costs associated with a secured loan, including valuation and legal fees

oIf you don’t have an asset to use as security or don’t want to put any of your property at risk, there are several other business finance options you could consider:

• Unsecured business loans: This allows you to borrow without providing an asset as collateral, but they can be more expensive and have more stringent eligibility criteria.
• Bridging loans: A business bridging loan can help bridge the gap between a big purchase and incoming cash. It’s a type of secured loan but is designed to be short-term.
• Asset finance: If you want to buy new assets like equipment or vehicles, this type of borrowing allows you to spread the cost over time.
• Revolving credit line: This allows you to access a line of credit up to a set limit until the end of the agreement. It is designed to help alleviate minor cash flow issues.  
• Invoice finance: This is a short-term credit solution that allows you to release money from your unpaid invoices.
• Merchant cash advance: This is a way to borrow against future card sales. You repay a fixed percentage of your card transactions until the loan is repaid.
• Peer-to-peer lending: A peer-to-peer business loan is a way of borrowing directly from investors, usually via an online platform.

A personal guarantee is an agreement between a lender and you as a business owner. It confirms you’ll be personally responsible for repaying a business loan if your business defaults.

Personal guarantees are usually only required on unsecured business loans and are most common for new businesses without a long trading history. However, a lender may still request a personal guarantee on a secured loan if they feel you’re a risky borrower.

Yes, and it can be easier to get a secured loan when you have a poor credit score compared to an unsecured loan. This is because the risk is reduced for the lender because they have the safety net of using the collateral to recoup the loan if you default.

However, having a poor credit rating can impact the loan terms you’re offered. You may not be able to get the best interest rates or borrow as much as you need to. If possible, take steps to improve your credit score before you apply for any business loan.

As long as you meet the entry criteria, start-up businesses should be able to get a secured loan.

Secured start-up business loans are often ideal for companies that have yet to build up a credit history but have a good amount of collateral against which to secure the loan.

They can be easier to get because lenders are often more receptive to secured loans for business, which offer more security for repayment.

Also, lenders may offer more funds if you secure a residential rather than a commercial property.

If we can issue an acceptance, we will send out a property questionnaire for you to complete. On receipt of this completed questionnaire, we will require the legal fees and, if applicable, valuation fees to be paid.

Once we receive the fees, we will contact solicitors, book the valuation, and raise loan paperwork for signature.

The process typically takes around four to six weeks, depending on how quickly the valuation can be booked and how quickly solicitors can complete the legal documents.

When all conditions have been satisfied and we have completed our final checks, we can release the funds within 24 hours.

You should be able to repay your secured loan before the end of the term; however, you will probably need to pay early repayment charges.

When you apply, check the terms and conditions to see what fees you might face. Some lenders don’t charge fees for repaying the loan early, but most will charge a percentage of the outstanding balance or interest.

The main cost of a secured loan is the interest you pay on the amount you borrow. If you know the interest, loan amount, and loan term, you can use our loan calculator to see how much this could cost in total.

Secured loans can also come with other upfront fees, including legal and valuation fees. Legal fees will vary depending on the solicitors you use and how much you want to borrow, but they can be more than £1,000.