Secured business loans

Secured business loans

Businesses often need to borrow money in order to grow, this is because they need the extra cash to buy new equipment, new property and invest in new skills as without these extra investments the business would not be able to achieve real scale.

If your business already owns assets like property, this can be very useful as you can raise working capital through a secured business loan.

When you are able to offer up security for a loan, your loan options increase and you will find plenty of banks and lenders who will be willing to lend to you. Whilst lenders will want your business to do well, they also need some assurances, so that if your business is unable to repay the loan they will be able to recover their money by taking possession of your assets and selling them.

The advantages and disadvantages of secured business loans

The advantages are:

  • You may get a lower interest rate and charges
  • You can borrow a large amount
  • You will get a longer period to pay it off

However the disadvantages are:

  • If you are unable to make the repayments, the assets that you have used as security could be at risk
  • The repayment terms are often inflexible
  • They can be harder to arrange and can take longer
  • There may be fees and penalties for early repayment

Other finance options

If your business needs to borrow money, but cannot or does not want to use assets as security for a secured business loan, then there are plenty of other options available.

Other finance options include:

  • An agreed business overdraft
  • Business credit cards
  • A fixed, variable or capped non secured loan
  • Invoice Discounting
  • Invoice factoring

If your business does business with other businesses and has a projected turnover of over 50K, then Invoice factoring may be great option for your business.
Factoring works by releasing up to 95% of the cash tied up in your unpaid invoices, often within 24 hours of you raising the invoice. With Factoring, the Factoring Company will manage your sales ledger, credit control and payment collection process, and will pay you as soon as you raise your invoices.

Factoring is a great solution as it’s a quick, flexible and controllable finance option that doesn’t require any assets to be used as security. It also saves you time and money on credit control tasks as this is done for you.

For further information regarding business loans please contact our advice team on 0800 597 4757 or apply online using the form opposite.