Secured business loans
A secured business loan is finance where the lender takes a legal charge over an asset, usually property, equipment, vehicles or the debtor book, in exchange for a lower rate, a larger amount and a longer term than the same company could borrow unsecured. Best for established limited companies with a real asset to pledge that want cheaper money or a higher ceiling, and prepared to accept that the asset is at risk if the loan is not repaid.
Founder & Managing Director, Muswell Rose, FundBiz
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind FundBiz. His background runs through commercial finance, mortgages and fintech, including as managing director of an invoice finance business. He oversees FundBiz's specialty finance comparison and the logic behind how businesses are matched to lenders.
Last reviewed: 18 July 2026
At a glance
- Best for
- Larger sums at lower rates, asset-rich companies
- Security
- Property, equipment, vehicles, invoices, debenture
- Rate vs unsecured
- Lower, because the asset carries the risk
- Speed
- Slower: valuation and legal work, typically weeks
- Key risk
- The secured asset can be repossessed on default
- Scope
- Ltd companies, LLPs, partnerships of 4+
How security changes the deal
Lenders price risk. On an unsecured loan the lender's only protection is the company's cash flow and, usually, a director's personal guarantee, so the rate is higher and the ceiling lower. Put a charge over a saleable asset into the deal and the lender's worst case improves dramatically: if repayments stop, the asset can be sold to clear the debt.
That is why the same company will usually be offered more money, for longer, at a lower rate, once it borrows secured. The other side of the bargain is real: the asset is genuinely on the line, and the arrangement takes longer to set up because the lender needs a valuation and legal charge before funds move.
What counts as security
| Security | Product built on it | Notes |
|---|---|---|
| Commercial property | Commercial mortgage, secured term loan | Strongest security; unlocks the largest sums and longest terms |
| Residential property | Secured loan, bridging | Director-owned property can secure company borrowing; legal advice required |
| Equipment and vehicles | Asset finance, asset refinance | The asset being bought (or already owned) is the security |
| Unpaid invoices | Invoice finance | The debtor book secures a revolving advance |
| Company assets generally | Debenture (floating charge) | Registered at Companies House; standard with many facilities |
Source: FundBiz product structure overview
View as plain-text Markdown
### Common forms of security on UK business lending and the products built around each. Terms vary by lender and asset quality. | Security | Product built on it | Notes | | --- | --- | --- | | Commercial property | Commercial mortgage, secured term loan | Strongest security; unlocks the largest sums and longest terms | | Residential property | Secured loan, bridging | Director-owned property can secure company borrowing; legal advice required | | Equipment and vehicles | Asset finance, asset refinance | The asset being bought (or already owned) is the security | | Unpaid invoices | Invoice finance | The debtor book secures a revolving advance | | Company assets generally | Debenture (floating charge) | Registered at Companies House; standard with many facilities | Source: FundBiz product structure overview
Each security type has a product built around it: see asset finance for equipment, asset refinance to release cash from kit you already own, commercial mortgages for premises, and bridging for short-term property-backed needs.
Secured vs unsecured: how to choose
Choose unsecured when speed matters more than price, the sum is modest, and the company would rather not tie an asset up: see unsecured business loans. Choose secured when the sum is larger, the timeline allows a valuation, and the saving over the life of the loan justifies the setup work. The two also differ on failure: default on an unsecured loan and the lender pursues the company and any guarantor; default on a secured loan and the named asset itself is at risk first. If the driver is a poor credit record rather than price, start at bad credit business loans, because security is one of the main routes to an approval after a decline.
Personal guarantees on secured loans
Security and a personal guarantee are different protections and lenders can ask for both. Where the asset is strong and the loan-to-value comfortable, the guarantee is often reduced or dropped; where the asset is specialist or the advance is high against its value, expect a guarantee as well. Our page on borrowing without a personal guarantee covers the products where security alone can carry the deal.
What you need to apply
- The Companies House registration number, with filings up to date.
- Details of the asset offered: what it is, ownership, any existing finance or charges on it.
- Three to six months of business bank statements.
- Filed accounts, or management accounts where filed ones are dated.
- A clear purpose and repayment plan for the borrowing.
Existing charges matter: if another lender already holds a charge over the asset or a debenture over the company, the new lender will need a priority arrangement or a release before completing. Checking the Companies House charges register first avoids surprises late in the process.
Frequently asked questions
What is a secured business loan?
A secured business loan is finance where the lender takes a legal charge over an asset, most commonly commercial or residential property, equipment, vehicles or the debtor book, so the asset can be sold to repay the debt if the company defaults. Because the lender has that fallback, secured facilities usually carry lower rates, larger amounts and longer terms than unsecured borrowing to the same company.
What can a limited company use as security?
The usual candidates are commercial property, residential property owned by the company or a director, plant and machinery, vehicles, and the sales ledger (unpaid invoices). Some lenders also take a debenture, a floating charge over the company's assets generally, registered at Companies House. The stronger and more saleable the asset, the better the terms it unlocks.
Is a personal guarantee still needed if the loan is secured?
Often the guarantee is reduced or waived when a strong asset carries the risk, but not always. Where the asset is volatile or hard to sell, or the loan-to-value is high, lenders may want a personal guarantee on top of the charge. Each lender sets its own policy, which is one reason to compare rather than take the first offer.
Are secured business loans cheaper than unsecured?
Usually, yes, for the same company. Security lowers the lender's loss if things go wrong, and that shows up as a lower rate, a higher ceiling and a longer possible term. The trade-off is time and cost up front: valuations and legal work mean a secured facility typically completes in weeks rather than days.
What happens if the company cannot repay a secured loan?
The lender can enforce its charge, which ultimately means repossessing and selling the secured asset. If the sale does not cover the debt, the company remains liable for the shortfall, and any director who gave a personal guarantee can be pursued personally for it. This is the core risk of secured borrowing and why the repayment plan matters more than the headline rate.
Can a new limited company get a secured business loan?
A short trading history matters less when there is a strong asset in the deal, which is why asset finance on new equipment and property-backed lending are two of the most accessible routes for younger companies. The asset does the reassuring that filed accounts would otherwise do. Fully unsecured lending is usually the harder route for a new company, not secured.
Who is eligible for finance through FundBiz?
UK limited companies, LLPs and partnerships of 4 or more. Sole traders are out of scope. Checking eligibility uses a soft search, so it leaves no footprint on your credit file.
Related finance
For borrowing in the company's name generally see limited company loans, for draw-and-redraw working capital a revolving credit facility, for guarantee-backed borrowing guarantor business loans, and for what facilities cost right now, current business loan interest rates.
See what your company could borrow against its assets
Open the eligibility checker →Soft search, no credit-file footprint. Limited companies, LLPs and partnerships of 4+ only.
Last reviewed: 18 July 2026.