SMEs use secured business loans to facilitate their growth. Find out how a secured business loan could help you achieve your business goals in this article.
“A secured business loan is a type of lending that allows businesses to use assets (both commercial and property) as collateral against the amount they want to borrow.“
A secured business loan is a type of lending that allows businesses to use assets (both commercial and property) as collateral against the amount they want to borrow. The lender will use the business’ assets as a guarantee, offering better repayment terms and interest rates to compensate.
Benefits of a secured business loan
Because your assets are used as collateral, lenders are taking on less risk. If you’ve been declined an unsecured loan, or need to take out a larger amount than you otherwise could, then this route might be ideal for your business. Secured business loans provide:
Things to consider
Secured business loans aren’t perfect for everyone, there are a few things to consider before committing to a loan of this type:
What assets are usually used for security?
Generally speaking, businesses will use their hard assets as collateral, such as commercial property (offices, shops, warehouses etc.), vehicles (vans, trucks, etc.), or heavy machinery (plant machinery, presses, etc.). It’s also possible to use either the net value of multiple assets combined, or cash, as security, but this depends on the lender and can come with different terms.
Secured vs unsecured business loan
Every business is different. You should consider every available option in order to establish which style of loan is perfect for you.
If your business does not have any high-value assets, if you’re worried about offering them as collateral, or if you need a quick-turnaround loan, then it might be worth considering an unsecured business loan. Unsecured loans are a fast, flexible alternative to secured business loans.
However, if you need to loan a higher amount, if you’ve got assets that you don’t mind using as security, or if you’re happy to wait a little longer for your money, then a secured business loan might be best for you.
Find the ideal secured business loan with Shire Business Group
As lenders are usually more lenient when offering this type of loan, it could be the perfect fit for your business. At the Shire Business Group, we work with tens of thousands of SMEs every year to access the funding they require to help achieve their business goals.
No matter whether you’re a farmer, a dentist, a gym owner, or anything in between, our specialists are on hand to help. We’re here to answer any questions you have; get in touch today for bespoke advice on how we can facilitate finance for your business.
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