Secured Business Loans: Simple large scale borrowing

If you want to borrow a large sum of money, from £50,000 or more, you will probably need a Secured loan. The good news is that a Secured loan can cut the cost of borrowing, and can help you borrow larger sums of money than other types of lending.

Secured loans are versatile and can be tailored to your business needs, with repayment terms to fit your turnover and budget. But they do mean a small additional risk to you and your business.

What is a ‘Secured’ Loan?

Like other types of lending, a secured business loan provides a cash lump sum, which you agree to pay back with interest, usually in monthly instalments.

They are ‘secured’ because to arrange them, the lender will require something as security in case you cannot pay the loan back. You give the lender a ‘charge’ over your security. This means they’ll have the legal authority to take the asset and sell it if you can’t make the agreed repayments.

If you don’t repay, the lender will have the right to take the asset you have used as security.

Secured loans are less risky for lenders, which is why they can have lower rates of interest than Unsecured business loans. But they mean more risk for you as a borrower because your loan provider can repossess your property if you do not keep up repayments.

How security works

Security may include a personal guarantee, security over whatever is being purchased with the loan or over assets in the business. Buildings, machine tools are often used, but it may also be possible to put your own home up as security.

You can only borrow an amount less than the value of the security you provide. So you can’t get a £200,000 loan with security worth £100,000. Loans are usually 50–70% of overall asset value.

The lender will look at your assets and make a valuation, which may involve a visit to your site to check the condition and potential saleability of your property. They’ll also want to see if the asset is ‘encumbered’. This means checking if there are any charges already on it.

The advantages of Secured Loans

Having security reduces the risk to the lender. This can allow them to offer a better deal than they might with unsecured lending.

You can have longer to repay, and enjoy lower interest rates, meaning monthly repayments can be lower and easier to fit in with your cashflow.

Lenders may prefer Secured loans for borrowers with an imperfect credit history.

Why you need Rangewell to arrange a Secured Loan

There are many secured lenders, ranging from high street banks and the new generation of challenger banks to specialist, niche and P2P providers. The rates and terms they offer can vary substantially depending on the 'security' being offered.

Some lenders tend to specialise in certain business sectors, where they have more experience of the risks and opportunities involved.

Finding the right business finance lender is essential to minimise the costs of borrowing. At Rangewell we work with lenders across the entire UK market, and can search every lending product to help you find the most appropriate lender and the most competitive deal.

We can also help you decide on the most suitable form of security to offer.

Why you should call us

When large sums of money and long financial commitments are involved, it pays to have expert support on your side.

Setting up a Secured loan is a major commitment, and it can mean a number of steps, including valuation.

Coming to Rangewell means getting our experts to help you with planning and arranging your loan, as well as finding the most suitable lenders.

We can discuss your objectives, and help find answers scaled to fit your turnover and your other obligations. When you call us, we can explain the options – and find you the solutions you need.