Secured Business Loan
Secured loans are available for a wide variety of purposes, including an endless list of business applications. As the name suggests, secured business loans are secured loans engineered exclusively for commercial customers.
Just as long as you have sufficient security to cover the costs of the loan, you could get a great deal from a specialist lender. Secured business loans are available for small and large businesses spanning all sectors, often with unbeatable rates of interest and rock-bottom borrowing costs.
What is a Secured Business Loan?
A secured business loan is simply a business loan issued on the basis of security (aka collateral) provided by the applicant. Valuable assets or items owned by the business are put up as security for the loan, which the lender has the right to take ownership of in the event of non-repayment.
While most secured loans are issued against properties (residential or commercial), it is also possible to qualify for a secured loan using other business assets. Examples of which include vehicles, office equipment and even shares in the organisation itself.
Secured loans are available with no upper-limits whatsoever, in accordance with the value of the assets used to secure the loan. This makes secure lending the ideal option for new and established businesses alike, looking to raise significant amounts of money without facing excessive borrowing costs.
Why Apply for a Secured Business Loan?
A secured business loan represents an affordable option for ‘unlocking’ the equity tied up in your business. Specialist secured business loans often attach significantly lower interest rates and overall borrowing costs than comparable conventional loans. As they are considered ‘lower risk’ by the lender, there is no need to impose excessive fees and elevated APRs.
The potential applications for a secured business loan are limitless, though are regularly used to cover the following expenses:
- Investment in new commercial property
- Expansion of an existing commercial space
- Office improvements and renovations
- The purchase of new equipment and resources
- Upgrading vehicles and machinery
- Consolidating existing debts
- Funding expansion into new markets or territories
In all instances, an affordable secured loan provides the business with the opportunity to grow, evolve and improve its performance. Ultimately allowing for the loan to be repaid comfortably and at an affordable rate of interest, while boosting the performance and prosperity of the organisation.
What Should I Consider Before Applying?
Applying for a secured loan for business purposes is a decision to be approached with due care and forethought. Assessing your requirements and repayment capabilities is paramount, but it is also important to consider the following before applying:
- The combined value of the assets you have available, which will need to be independently valued by an approved third party.
- Whether your business has an established and convincing financial track record, which may be taken into account by the lender.
- The alternative options available, such as credit cards, unsecured business loans, overdraft facilities and so on.
- Whether you’ve considered all available options by way of a thorough whole-market comparison, with the help of an independent broker.
- If there is an allowance to repay the loan early, which could potentially save your business a lot of money.
Raise all questions and concerns with an approved independent broker ahead of time, in order to ensure you make the best possible decision for your business.