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What is a Secured Business Loan?
A secured business loan, also known as a secured commercial loan, is where a business’s property or owners residential/B2L property is used as collateral. The amount of money a business can loan will therefore usually depend on the value 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.
With a secured loan, risk is significantly reduced for the lender, which therefore increases your chances of getting approved. This also allows you to borrow more money for a longer term, thus reducing your monthly repayments and making those repayments easier to digest.
Don’t want to be secured against your assets? Look into our unsecured business loans instead.
Key features and benefits
- 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, dependant on the lender. Our lenders will be able to offer up to 75% LTV.
- Term: Up to 30 years. Some lenders offer interest only terms.
- Cost: Rates starting from 4.95% per annum, depending on age of business, affordability and LTV.
- Security: Our lenders can secure on a UK residential or commercial property.
- Speed: Applications can be processed within 24 hours from receiving a full proposal.
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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. 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?
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 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.
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.
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 on 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 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.
Why choose Aurora Capital for secured business loans?
Aurora Capital are experts in business funding in all capacities, and have had years of experience helping clients raise the necessary capital to grow and expand.
Our powerful decision engine pairs businesses looking for quick loans with trusted lenders offering great interest rates and repayment terms. Whether you’re looking for unsecured or secured business loans, merchant cash advances or property finance, we have the expertise to guide you toward the best decision for you and your business.
Get your free, no obligation quote today!
Prefer to talk? Call us on 020 3355 7462
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