Secured Business Loans for UK Businesses
Borrowing where your company offers agreed security to the lender. Understand what that security covers, what else you may be asked for, and whether it’s the right structure, before you apply.
Wize Finance introduces UK businesses to funding. Tell us what the money is for and what security might be available, and we’ll explain the options and the next step.
Tell us the amount, what it's for and the property or assets you could offer as security. The team reviews your enquiry and discusses the options.
What is a secured business loan?
A secured business loan is business borrowing where the lender takes agreed security. If the company doesn’t repay, the lender has rights under the security agreement.
What counts as security depends on the lender and the product. It may be a charge over a specific asset, such as property or other assets the business owns. Some lenders take broader security over the company. The security is agreed as part of the loan and set out in the documents you sign.
It isn't the same as a personal guarantee.
A guarantee is a promise by an individual to repay. Security is a right over assets. A secured loan can involve one, the other or both.
The money is typically used for agreed business purposes, subject to the lender’s criteria. Some needs have their own specialist products, such as buying property or equipment, and those are covered in the last section of this page.
How security works: assets, company charges and personal guarantees
“Secured” can mean different things depending on the lender. It helps to know which of these three you’re being asked for, because each affects the business and its directors differently.
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Security over a specific asset
The lender takes a charge over an identified asset, such as a property. That gives the lender rights over that asset under the security agreement if the loan isn’t repaid. The asset stays in use while the loan runs, but the charge stays in place until the borrowing is cleared. If the asset already has a mortgage or charge on it, the new lender will usually need to know. Some arrangements may need the existing lender’s involvement or consent.
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A company charge or debenture
Some lenders take broader security over the company’s assets, often through a document called a debenture. This can include fixed security over identified assets, and floating security over assets that change in the normal course of trading, such as stock. If you’re offered a secured loan, ask whether any company charge or debenture is being taken, as well as asking about the specific asset.
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A personal guarantee
A personal guarantee is separate from any security the company grants. It’s a promise by a director, or another individual, to repay if the company can’t. A lender may ask for one alongside secured borrowing, depending on the lender and the product. The terms of the guarantee decide what the individual is actually liable for.
If you’d rather avoid a personal guarantee, raise it at the start. Business loans without a personal guarantee
If security involves personally owned assets
How lenders assess the amount and the application
Planning a larger requirement? Our £250,000 business loan and £500,000 business loan guides cover the questions to consider when preparing a substantial funding enquiry. Security and eligibility depend on the provider and proposal.
Two questions sit behind any secured lending decision: whether the security is suitable, and whether the company can afford the repayments.
A valuable asset doesn't replace the affordability check.
Lenders commonly look at:
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The proposed security:
what it is, its value, and how readily it could be relied on
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Existing charges:
any mortgage or charge already registered against it
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Trading and financial performance:
turnover, profitability and how consistent they are
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Cash flow and affordability:
whether the business can meet repayments alongside its other commitments
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Existing borrowing:
what the company already owes
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Credit profile:
the company’s and, often, the directors’
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Purpose:
what the money is for
Each lender weighs these against its own criteria, and an offer may be for a different amount or on different terms from those requested. Wize Finance works with UK sole traders, limited liability partnerships (LLPs), limited companies and PLCs. Which products and lenders are available can depend on how your business is set up.
If you already have a figure in mind, our guides cover common loan sizes:
These are guides, not limits.
Costs and what security adds to the process
What to compare
What a secured loan costs depends on the lender, the product, the security and your business. When comparing offers, look at:
- Interest, and the APR where quoted
- The total amount repayable: the clearest like-for-like figure
- Arrangement fees, where they apply
- Valuation costs, where the security needs to be valued
- Legal costs, for preparing and registering the security
- Early repayment charges, where they apply
Some of these costs arise only because security is involved, so include them when comparing a secured offer with an unsecured one.
What security can add
Taking security can mean extra steps, depending on the arrangement. A lender may need to:
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confirm who owns the asset
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value it
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prepare and register the security documents
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deal with any existing mortgage or charge, which may involve the other lender
Helpful to have ready: current company details and financial information; details of the asset you’re proposing as security; evidence of ownership where relevant; any existing mortgage or charge over it; existing business borrowing; and any recent valuation you already hold. You don’t need a valuation before you enquire.
After you enquire: Wize Finance looks at whether secured borrowing is likely to suit and, where appropriate, introduces you to a funding provider. The lender then assesses the application, carries out any checks on the security, and makes the lending decision. For the wider application journey, see Business Loans.
Advantages, disadvantages and repayment risk
Possible advantages
- The security can give a lender more confidence, which may affect the amount, term or pricing offered, depending on the lender and your business
- Can suit a company that has suitable assets and wants to use them to support its borrowing
- Repayments are set out in the loan agreement, which helps with planning
Possible disadvantages
- The secured asset may be at risk if the agreement isn’t kept to
- Valuation, legal and registration steps can add cost and paperwork
- A personal guarantee may be requested as well as security
- A charge on an asset can affect what you can do with that asset while the loan is outstanding
If repayments can’t be maintained
If you expect difficulty keeping up repayments, speak to the lender early, and consider independent advice.
Compare your options
Want to compare your funding options?
Secured, unsecured or a specialist product?
Secured or unsecured
The core trade-off is between putting an asset forward and relying on the business’s figures alone.
| Compared on | Secured | Unsecured |
|---|---|---|
| Asset pledged | Yes, agreed security | No specified asset |
| Extra steps | Valuation, legal and registration work may be needed | Typically none for an asset, though checks still apply |
| Asset exposure | The secured asset may be at risk | No pledged asset at risk |
| Personal guarantee | May be requested | May be requested |
| What the lender focuses on | Security and affordability together | The business’s finances and affordability |
Amount, term and price can differ between the two, but neither is automatically cheaper or quicker to arrange.
It depends on the lender, the product and your business, and Wize Finance can talk both routes through with you. Secured borrowing may be worth considering if you have suitable assets and are comfortable using them. If you’d rather not pledge an asset, see Unsecured Business Loans.
When a specialist product may fit better
- If you're…
Buying or refinancing commercial property
Look at: Commercial Mortgages
- If you're…
Covering a short-term, property-linked funding gap
Look at: Bridging Finance
- If you're…
Buying equipment, machinery or vehicles
Look at: Asset Finance
- If you're…
Covering day-to-day running costs
Look at: Working Capital Loans
- If you're…
Borrowing for the business, using agreed assets as security
Look at: A secured business loan
- If you're…
Borrowing without pledging a specific asset
Look at: Unsecured Business Loans
Secured business loan FAQs
What can be used as security for a business loan?
It depends on the lender and the product. It may be property or other assets the business owns, and some lenders take broader security over the company. The lender decides what it will accept.
Do I still need a personal guarantee if the loan is secured?
Possibly. A personal guarantee is separate from the company’s security, and a lender may ask for one alongside it, depending on the lender and the product. Its terms set out what you’d be personally liable for.
How much might I be able to borrow?
It depends on both the security and the business. The lender considers the value and suitability of the asset and whether the company can afford the repayments. An offer may differ from the amount requested.
Is a secured business loan cheaper than an unsecured one?
Not automatically. Security can affect how a lender prices a loan, but secured lending may also involve valuation, legal and registration costs. Compare the total amount repayable, including fees.
Does secured borrowing take longer?
It can involve more steps, such as valuing the asset and preparing the security documents, especially where an existing charge is involved. How long that takes depends on the lender and the arrangement.
What happens if the business can’t repay?
The lender’s rights depend on the loan and security agreements, and the secured asset may be at risk. If a personal guarantee was also given, personal exposure depends on its terms. Talk to the lender early if you foresee difficulty.
Find out whether secured borrowing could work for your company
Tell us what the funding is for, roughly how much you need and what security might be available. We’ll explain whether a secured loan is likely to fit, or point you towards a structure that may fit better.