Compare Secured Business Loans
Quote Goat make it quick and easy to compare secured business loan rates from over 80 lenders, from high street banks to specialist small business finance providers.
What Is A Secured Business Loan?
Secured Business Loans require a company to provide security to the lender using their company assets. Providing assets as security reduces the risk for the lender and can therefore provide access to improved borrowing rates as well as reducing the impetus on a company’s credit score and turnover. A secured business loan is effectively a way of unlocking capital tied up in your assets.
What are the benefits of a secured business loan?
No Personal Guarantee
If a business provides a commercial asset as security, this can remove the need for directors to use personal assets, such as property, to meet a lender’s risk criteria. However, if a business does not have enough value in commercial assets, then a secured business loan can be taken out against personal assets.
Improved Interest Rates
Providing assets as security typically gives access to better exchange rates in comparison to an unsecured business loan.
Less Reliance on Turnover & Credit Score
Due to secured business loans requiring a form of security, qualifying criteria for a business’s turnover & credit score can be lowered. This is because the lender has the right to sell the asset(s) to recover costs in the event that a company defaults on repayments, therefore placing less reliance on turnover to recover costs.
Broad range of Accepted Assets
Lenders can accept a range of assets for a secured business loan, making a secured business loan an option for a wide variety of companies.
What are the disadvantages of a secured business loan?
Risk Placed On Assets
Of course, if a company were to default, the security provided is at risk of being seized to recover costs
Time To Funding
Secured Business Finance typically takes longer to obtain finance as opposed to other forms of lending
To access a secured business loan a business needs to have assets with a high enough value to offer necessary levels of security to the lender.
What Assets Can Be Used For Security?
Typical assets used for collateral are buildings, land, vehicle, machinery & equipment. Lenders prefer these types of assets over intangible assets such as a company brand.
An Example Of A Secured Business Loan
A printing business borrows £50,000, using their printing machinery as security for the loan. The business agrees to pay back the loan over a 24-month period at an interest rate of 9.3%
Interest payable: £4987.02
Totally Repayment: £54987.12
Secured Business Loans & The Enterprise Financial Guarantee
The EFG is a Government initiative to help small businesses access secured business loans where that business would otherwise be unable to meet qualifying criteria.
With the EFG the government backs up to 75% of the value of the loan to cover the losses that a lender may suffer. The EFG is only available to businesses that otherwise would not qualify for a secured business loan.
There are over 40 accredited EFG lenders.
There is a 2% fee payable each year to the Government towards the cost of the scheme by business supported by the EFG.
Turnover under £41,000,000
Borrowing amounts from £1,000 to £1,200,000
UK based business operating in an eligible sector (some sectors are not supported)
Find The Right Secured Business Loan For Your Company
Deciding which type of funding is the best option for your business is not to be taken lightly. When you apply for funding via Quote Goat, you will benefit from expert advice to suit your needs. You can also compare secured business funding quotes from over 80 lenders, giving you the peace of mind that you are accessing financing at the right cost.