Reviewed 30 September 2026. General information, not advice.
How a secured business loan works
A secured loan gives the lender rights over an asset if you do not meet the loan terms. Security can include commercial property or another acceptable business asset. A lender may also ask for a personal guarantee.
The available amount depends on the asset, existing charges, the business finances and the lender’s criteria. Security does not remove the need to show that repayments are affordable.
Weigh the cost against the commitment
Security may change the amount, rate or term a lender can offer, but it does not guarantee a cheaper deal. Compare total cost over the full term, including fees, valuations and legal work.
A longer term can reduce the monthly payment while increasing overall interest. If the interest rate is variable, consider how higher payments would affect cash flow.
What you may need to prepare
Have details of the asset, its ownership, an estimated value and any existing finance or charges ready. Lenders may request a professional valuation, financial records and a business plan.
Take time to understand the security documents, default terms and any restrictions on selling or refinancing the asset.
Questions worth asking
Which assets are at risk? Is the lender taking a first or second charge? Are there early repayment charges? What happens at the end of the term?
Consider independent advice before committing business or personal property as security. The consequences of a missed payment can extend beyond the loan itself.
A few common questions
Are secured loans always cheaper?
No. Pricing depends on the lender, the business, the security and the term. Compare the total cost, not just the advertised rate.
Can property with an existing mortgage be used?
Possibly, depending on the existing lender, available equity and the new lender’s criteria. Further borrowing can put additional pressure on the asset and on cash flow.
British Business Bank: finance options for smaller businesses
Eligibility and product terms change. Confirm the current details with the provider before making a decision.