An Overview: Secured Business Loans

To operate effectively, businesses require various types of funding. As well as your working capital and revenue streams, you may have backing from investors and you may have invested a significant proportion of your own funds into the company.

Do you want to expand your business? Could you bring in more revenue by operating in a different location? Does your company equipment need updating or modernising? If so, a business loan may enable you to access the funds you need, and a secured small business loan could be an easy way to obtain financing.

Available from a range of lenders, secured small business loans provide access to a considerable amount of capital and may allow business owners to achieve their objectives. However, secured loans aren’t always the right choice for small businesses. Before applying for a secured loan or committing to a particular type of funding, it’s vital that you find out more about the funding options available and obtain financial advice when it’s necessary to do so.

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<h1>An Overview: Secured Business Loans<h1/>
What Is a Secured Small Business Loan?

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What Is a Secured Small Business Loan?

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What Is a Secured Small Business Loan?

A secured small business loan is a credit or advance which is paid to a small business by a lender. The business will then repay the loan, along with a set amount of interest. A secured loan offers additional protection to the lender because the business puts some or all of its assets up as collateral. This means that if the business fails to make repayments, the lender has the right to seize assets.

Generally, businesses are required to pay back secured small business loans on a monthly basis. Most lenders will set out strict repayment terms when they offer you a loan and the amount of interest you’ll pay will be built into your monthly repayments.

<h3>Who Are Secured Business Loans For?<h3/>

Who Are Secured Business Loans For?

Typically, a secured loan for small business  is aimed at businesses which have some form of assets. Assets could include property, machinery, manufacturing equipment, and vehicles, as well as industry or business-specific paraphernalia.

Due to this, secured loans are most suited to businesses which require these types of assets in order to operate. A manufacturing business, electronics company or fleet management firm may own a considerable number of valuable assets, for example, and this could enable them to raise a significant amount of funds via a secured loan.

Businesses which are able to operate without assets may be less suited to asset-based funding, simply because they won’t have the assets necessary to raise a considerable amount of funds.

If your business operates from rented premises and functions with minimal stock or equipment, for example, the company’s assets may be fairly limited. As you won’t be able to offer any form of asset-based security to the lender, you’ll be less likely to qualify for this type of funding.

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Raise £3,500 to Over £500,000 For Your Small Business

<h4>What are the advantages and benefits?<h4>

What are the advantages and benefits?

When businesses are able to obtain secured small business loans they can benefit from relatively low interest rates. As lenders have an interest in business assets and can seize them if the loan isn’t repaid, this type of lending is typically less risky for them. Due to this, lenders are often willing to lend with more flexible repayment terms and with lower interest rates. Overall, this means businesses may benefit from paying less interest on a secured loan and, therefore, reducing their outgoings over the lifetime of the loan.

What businesses qualify?

Almost any type of business can qualify for a secured loan, providing they have the assets to offer as collateral. Lenders are generally more interested in the capital, assets and revenue of a company, rather than the industry in which they operate.

Many lenders will only offer secured small business loans to companies which have traded for a certain amount of time, although this varies between loan providers. Similarly, some lenders may stipulate that businesses must have a certain level of revenue before they qualify for a secured loan.

However, lenders have additional security due to the secured nature of the loan so businesses may be able to access more flexible terms, providing they have the appropriate amount of collateral in the business.

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Raise £3,500 to Over £500,000 For Your Small Business

What businesses qualify?

Almost any type of business can qualify for a secured loan, providing they have the assets to offer as collateral. Lenders are generally more interested in the capital, assets and revenue of a company, rather than the industry in which they operate.

Many lenders will only offer secured small business loans to companies which have traded for a certain amount of time, although this varies between loan providers. Similarly, some lenders may stipulate that businesses must have a certain level of revenue before they qualify for a secured loan.

However, lenders have additional security due to the secured nature of the loan so businesses may be able to access more flexible terms, providing they have the appropriate amount of collateral in the business.

What can I secure against one?

In order to obtain a secured small business loan, the business must own assets in some form.

Of course, the assets needed will depend on the size of the loan. If you wish to borrow £10,000, for example, a lender may accept fairly modest assets, such as a selection of company equipment which meets this value. Alternatively, a secured loan of £100,000 will only be provided if the business has assets worth this amount. In such cases, business properties, vehicles and plant machinery are often used to secure the loan.

If the business does not own enough assets to obtain a secure small business loan, loan providers may still be willing to lend if the company director or directors offer a personal guarantee. This means that their personal assets, such as their home, can be used as collateral in order to obtain a secured small business loan.

Do Capify offer secured business loans?" alt="Do Capify offer secured business loans?">

Do Capify offer secured business loans?

Capify specialise in business funding and we can help you to obtain the right type of finance for your business. Offering both unsecured business loans and merchant cash advances, our financing options provide a workable alternative to traditional secured loans.

Available to all types of businesses, Capify business loans are perfect for limited companies with at least 6 months of trading history. Whilst you may not have the assets to obtain a secure small business loan, a Capify business loan will ensure you can access much-needed working capital and grow your business accordingly.

Alternatively, a Capify merchant cash advance offers increased flexibility to small businesses.

Aimed at companies which accept debit and credit card payments, a merchant cash advance allows you to access the funds you need and allows you to make repayments via a percentage of your daily card payments. With no collateral required, a merchant cash advance is available to a wide variety of businesses and ensures companies can access the capital they need, regardless of their size.

To find out how much funding you could obtain, why not try our small business loan calculator now?

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Our Unsecured Business Loan Calculator

Are you considering an unsecured business loan? With our specifically-designed calculator, finding out if you’re eligible for a loan
– and the value that you can apply for – takes seconds. Try it today to discover if an unsecured business loan is a right fit for you:

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