Need to borrow a large sum for your business? Looking for lower interest rates or longer repayment terms?
A secured business loan could be the right solution. This type of loan uses one or more business assets—like property, vehicles, or equipment - as collateral. By reducing risk for the lender, you may unlock better terms and borrow more compared to unsecured lending.
A secured business loan is a type of finance that’s backed by one or more valuable business or personal assets. These assets act as security, giving the lender confidence they can recover losses if you fail to repay the loan.
This additional reassurance often leads to:
lower interest rates
longer repayment terms
higher borrowing amounts
Loan amount: Typically from £10,000 to £20M
Interest rate: Lower than unsecured loans (but varies by lender)
Term: Often between 1 and 10 years
Collateral required: Property, machinery, vehicles, invoices, or other assets
Approval time: Longer than unsecured loans due to valuation checks
Commercial property: office space, warehouses, retail units
Personal property: your home (if used as a personal guarantee)
Equipment or vehicles: business-critical assets like vans or machinery
Outstanding invoices: future receivables or debtor books
Cash reserves or savings: less common, but acceptable for some lenders
A business wants to borrow £250,000 to expand into a second site. By securing the loan against their commercial premises (valued at £800,000), they access a competitive interest rate and a 7-year term - far better than they could with an unsecured loan.
Fortunately, the majority of lenders will accept a range of tangible and intangible assets as security, making secured business loans an accessible option for a variety of business sectors.
Common tangible business assets include, property, land, machinery, equipment, vehicles, accounts receivables.
Intangible assets include trademarks, copyrights, intellectual property, licences and patents. You might be able to offer multiple assets or your own personal assets. Keep in mind that a personal guarantee may also be required.
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
Asset at risk: if you default, the lender can repossess the secured asset
Slower process: asset valuation can delay approval
Legal implications: personal guarantees or charges over property may apply
Less flexible: you can’t sell the asset while it’s being used as collateral without permission
Eligibility varies: not all businesses will qualify depending on credit score, trading history, and asset type
Feature | Secured Loan | Unsecured Loan |
Requires collateral | Yes | No |
Loan amount | Higher | Typically lower |
Interest rate | Lower | Higher |
Approval speed | Slower (due to asset checks) | Faster |
Repayment terms | Longer | Shorter |
To improve your chances of approval, lenders will review:
type and value of the asset
business trading history (typically 12–36 months)
business or personal credit score
loan-to-value (LTV) ratio
purpose of the loan
Assets with clear ownership, strong resale value, or low existing debt against them are typically favoured.
Identify suitable assets to offer as collateral
Gather documentation: asset valuations, business accounts, proof of ownership
Compare lenders or use a broker like Funding Options by Tide
Submit an application and wait for the lender’s underwriting process
Agree terms and receive funds upon final approval
Unsecured business loans are for quicker access with no collateral
Invoice finance to release money tied up in unpaid invoices
Asset finance to spread the cost of purchasing new assets
Revolving credit facility is a reusable working capital
Merchant cash advance is based on card sales, with flexible repayment
An unsecured business loan doesn't require you to offer business assets as security. However, the lender still needs to feel confident that you can repay in order to lend to your business, so they will look closely at its credit rating and trading history.
Unsecured business loans could suit businesses that don’t own assets, would prefer not to offer an asset as security, or those who need finance quickly.
Unlike a secured business loan – which is largely informed by the value of the asset offered as security – the amount you can borrow through an unsecured option will typically be a multiple of your annual business turnover.
Unsecured finance tends to be quicker to arrange because you don’t need to go through the asset valuation process. You’ll probably get the funds quicker but interest rates are usually higher.
By offering business assets as security, you’re reducing the level of risk from the point of view of the lender. In this sense, unsecured finance is seen as riskier which is why interest rates can be higher. With secured finance, you’re more likely to be able to borrow a larger amount over a longer period and at a lower interest rate.
Secured or unsecured, always consider the total cost of the loan. If you borrow funds at a low interest rate, bear in mind that costs can accumulate over the long term.
Secured business loans aren’t for everyone. A startup, for instance, simply might not have the assets yet. If you’re unable or unwilling to get a secured business loan, there are many alternative financing options to explore, including:
You can’t get a secured business loan if you don’t have a business asset to use as security, or do but aren’t willing to offer it as security for a loan (for example, because you don’t want to risk losing it if you can’t meet the repayments). Remember: if you don’t repay your business loan the lender can sell the asset to recoup the costs.
It’s likely that you’ll have to pay upfront costs when taking out secured finance. For instance, if you’re using property as security, you may have to pay valuation fees and legal fees if the lender puts a legal charge on it. You will still have to meet the costs of valuation if your loan is declined or you are offered a smaller amount.
It can take longer to get a secured business loan because of the lender’s due diligence processes. It’s a good idea to have all your relevant business paperwork together when you apply, to avoid any unnecessary delays.
You can use Funding Options to apply for a secured or unsecured business loan. The process is quick – you’ll typically receive a decision within 24 hours. Just tell us how much you need to borrow and what it's for, and we’ll compare 120+ lenders to match your business with the right finance options for its needs.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Vivek Seda is the Asset Based Lending & Property Team Lead at Funding Options. Vivek has been in the commercial finance industry for over five years, helping SMEs in the UK access over £40m of funding in that time. He also supports the business on working on corporate finance and structured transactions successfully funding Acquisitions and MBOs for businesses.