The smarter way to find Secured Loans
What is a secured loan?
A secured loan is a business finance option that requires you to offer collateral for the money that is lent. This security would typically be a company asset (often referred to as PPE) or a director’s personal property.
Compared to unsecured loans, secured loans are usually available to a higher value and attract lower interest rates, due to the reduced risk to the lender.
In addition, their fixed repayment schedule and rates mean that you know the terms from the outset and these do not usually entail any exit or early repayment fees.
Why choose a secured loan for your business?
For start-ups and SMEs looking to finance growth, it can be difficult to find a lender prepared to offer competitive rates, especially during those early years of trading.
This is where secured business loans can help: because you use your property or business assets as security you can offset potential risk for the lender and attract lower rates of interest while avoiding any large upfront payments.
Particularly for businesses without a lengthy trading history, or that have already exhausted providers of unsecured loans, <link> secured business finance options can significantly increase the likelihood of your being offered a new source of credit.
Where can you find a specialist secured lender?
At Financer.co we can partner you with many secured loan providers.
When you apply online for a loan with us, we match your business finance needs with providers who understand your sector and have plenty of insight into the help that your business requires.
What can you use a secured loan for?
Secured loans can be used to finance a number of things.
Some typical uses include:
- Businesses expanding into a new area
- Businesses investing in new equipment, tools or machinery
- Businesses looking to increase their headcount to handle expected growth
- Businesses requiring a move to larger premises
- Businesses needing extra working capital for daily operations
What else should you know about secured loans?
Secured business finance is suitable for SMEs in their early days of trading and mature businesses alike. They offer scalable advantages that can make them an attractive proposition and, for businesses with suitable assets, they are accessible and offer affordable repayments.
Particularly for those looking to borrow a large sum of money (£25,000+) and for those who have a poor credit rating, secured loans can be an attractive option.
But it’s important that you are aware that they do come with potential risks should you not be able to meet the repayments. In effect the assets that you use to secure the loan are part of your guarantee that the loan will be repaid and can be repossessed should you fail to do so.
The terms and the amount you can borrow may depend on a number of factors, including:
- Your income
- Your credit score
- Existing credit commitments
- The amount of equity available in your property/assets
Some consider remortgaging as an alternative to taking on a secured loan. While rates for mortgages can be lower, there is often high upfront fees and a commitment to paying interest for longer on the amount borrowed.
If your business needs a large amount of capital at relatively low interest rates – and the flexibility to make repayments quicker than the initial term – then a secured loan can be an attractive option.
Secured loans are available from traditional banks as well as alternative finance providers, and you can apply to a number online today.
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