Secured Business Loans
Secured Business Loans for Any Business Purpose
If you want a business loan based on assets owned by your business, a secured business loan might be just what you’re looking for. Secured business loans are suitable for businesses that own assets like commercial property, vehicles and machinery, or companies that don’t offer personal guarantees.
There is a wide range of lenders offering secured business loans, and the amount you can borrow is based on the value of the asset(s) you have available.
What Is A Secured Business Loan?
It’s a loan secured by assets – valuable items owned by the business. This means that if your business can’t repay, the lender has the right to sell the asset, in order to get their money back.
On the other hand Unsecured Business Loans aren’t based aren’t on assets, which means the lender will have at a different criteria.
Business loans are based on your business assets. If your business isn’t eligible for an unsecured loan, but owns assets like vehicles, machinery, equipment or commercial property, you may be able to use these business assets as security for a secured business loan.
Using an asset as security – Secured Business Loans are often described as a way of ‘unlocking cash’ – they use existing items in your business as security. That means that you can take out a secured business loans based on the value of something your business owns. Because the finance is secured against a physical asset, the lender has the extra reassurance that if things go wrong and you can’t keep up with repayments, they take the asset to recoup their losses.
This lowers the risk giving the lender more confidence in lending to your business, and often means they wont require a personal guarantee or a deeper look into your credit history.
A Range Of Assets Accepted
The asset could be a variety of things; commercial property like a warehouse, plant machinery, vehicles, and much more. The lender will need to know how you intend to use it and what it’s worth – but overall, the breadth of equipment accepted means that a secured business loan is open to a wide range of business in many sectors.
The Benefits Of Secured Lending
- Often cheaper than unsecured lending because there’s less risk for the lender
- The more assets you own, means more borrowing potential
- No need to involve personal assets via a personal guarantee
- The asset value is main focus, less so on trading history or credit rating