Whether you need to cover a short-term funding gap, invest in new premises or support general growth, accessing external finance for your business could be exactly what you need to move forward. Secured business loans are an attractive option for those with company or personal assets looking for higher loan amounts at the best possible rates. Find out below how they work, who they’re suitable for and how to apply.   

What is an
Secured Business Loan?

A secured business loan is a type of finance that is backed up by company or personal assets such as property or land.

In comparison to an unsecured business loan, securing a loan with assets reduces the level of risk for the bank or alternative finance provider as they can repossess and sell on these assets if a company becomes unable to make the repayments.

This is sometimes referred to as asset-based lending, and typically offers better rates for businesses due to the lower level of risk on behalf of the lenders.   


How does a secured business loan

Secured business loans are a traditional source of finance in that you apply for the amount of funding you need for your business based in part on the value of the assets you can offer as security. If the lender accepts your application, they’ll transfer your loan in a lump sum but will have the right to use your assets to make their money back if you default on the repayments.

Your repayments will be set out within an agreed term to cover the value of the funding, plus a small amount of interest on your outstanding balance. As an example, Merchant Money Secured Business Loans are available with repayment terms from 3 to 36 months.

A company director and/or key stakeholders may also be asked to sign a personal guarantee to become liable for the debt should the company default. With Merchant Money, personal guarantees are always required. Lenders can also take into account your trading history and credit rating when reviewing your application. 

Secured vs unsecured business loan-
what’s the difference?

As discussed above, the key difference between the two is that a secured loan is backed up by assets. This brings access to higher levels of funding and better interest rates, as the lender has more reassurance if any problems crop up later down the line. A secured loan will generally be the better option if you have business or personal assets, but an unsecured loan will be more accessible if you don’t.

The legal processes involved usually mean that you’ll have to wait longer for an application for a secured business loan to go through. There may also be added up-front costs associated with these processes.   

With the main focus on your assets with a secured loan however, there’s less emphasis on factors such as your credit rating and trading history. While they’re still important, they may not hold you back in the same way they might with an unsecured business loan. 

What are the advantages of
secured business loans?

Secured business loans offer a great way to access the funding your business needs if you have company or personal assets to offer, or if a director or shareholder is a homeowner. The key benefits include:

  • Larger loan amounts: By offering assets to back up a loan, you are effectively able to unlock higher levels of funding than you would without them. This is ideal if you need to make a significant investment in your growth or cover a funding gap over an extended period

  • Cheaper in the long term: The risk level on behalf of the lender is reduced as they can use your assets to get their money back if they need to. This benefit on their side is passed on to you through better interest rates, meaning you’ll pay back less overall than you would with an unsecured loan.

  • A range of assets accepted:Our Secured Business Loans can be backed up with commercial or residential property from any company director or shareholder. This makes them a viable option in a variety of industries and for homeowners.


Does my business

We offer this product to all UK-based sole traders, limited companies or partnerships. If you think it could be the right financial option for you, you could qualify if you have:

·         A minimum annual turnover of £100,000

·         A minimum of one year’s accounts

How do repayments

We offer repayment terms from 3 to 36 months and collect payments via a weekly or monthly direct debit. You can also repay early via bank transfer, which is a great way of reducing the total amount of interest you’ll pay.

If a regular direct debit doesn’t work for your business, our Merchant Cash Advance could be a good alternative. With this type of finance we automatically collect a small percentage from your card transactions - you can read more about it on our Merchant Cash Advance page.   


Who are they suitable

In theory, any company that has valuable assets could apply for a secured business loan. The breadth of asset types accepted means they aren’t restricted to certain businesses within specific sectors.

Some lenders – including Merchant Money – accept residential property as security. For companies without much in the way of valuable business assets, business loans secured against property are ideal as a means of accessing higher levels of finance. We also accept residential or commercial property from any company shareholders or directors.

Secured business loan requirements typically include a minimum amount of time trading, which makes them less suitable for companies only just starting out. Secured business loans for start-ups are still available however - you only need to have a minimum of one year’s financial accounts with Merchant Money. For a Merchant Cash Advance we will consider businesses that have six months of merchant statements.


What are the

There are few disadvantages, but there are a couple of factors you’ll want to weigh up before deciding if a secured business loan is the right option for you. Firstly, if you have minimal or no company assets and live in rented property, you’ll likely struggle to put up enough security to access higher amounts. The maximum business loan Merchant Money offers to companies in which all directors are tenants is £150,000 – our Merchant Cash Advance could be a suitable alternative if you earn more than this in monthly card transactions.

Secondly, the application process with a secured loan can take time with some lenders. There can be several legal processes to go through and you’ll need to have your assets officially valued, so if you need funding tomorrow, you’re unlikely to get it in time. That being said, at Merchant Money we can offer you an answer within 48 hours once we’ve got everything we need, so fast secured business loans aren’t impossible.

You’ll also need to account for the up-front costs involved with asset valuation. Secured business loans do typically work out cheaper over time however, so if you have can afford these small initial fees, it should pay off. 

How much can I

Our Secured Business Loans for UK companies are available from £5,000 to £500,000. We want to help you find the right funding for your business, which means that we’ll carefully assess the amount you can borrow and the interest rate we offer based on a range of factors such as the value of your assets and your credit rating.

Getting a quote with us could give you a more accurate idea of how much you can borrow, for how long and at what rate. You can find more information on how to apply below.

How much are interest rates
and do I need a Personal Guarantee?

The interest rates we offer typically vary from 1.75% up to 3% based on the loan amount, the loan term, and the profile of your business. We’ll agree on this rate with you before the loan term starts, and only charge interest until the day you settle. 

We will also ask for a personal guarantee with all of our business loans. This confirms that you, as the business owner, will become personally liable for any remaining debt should your company become unable to make the repayments.

How to get a secured Business Loan
from Merchant Money?

The best way to apply is using our ‘GET A QUOTE’ button. Someone from our friendly team will call you back within minutes to chat through your options and ask you to provide a few details such as recent bank statements, financial accounts and VAT returns.

Once we’ve got everything, we need to review your application, we’ll give you a decision within 48 hours. Bear in mind that the type of security you offer can affect how long your application takes – an equitable charge on a property, for example, does not require the consent of your mortgage provider, but a legal charge can take up to a few weeks at a time to be processed and is largely out of our hands. 

Why choose
Merchant Money?

If you’re looking for the best secured business loan for your company, there are several reasons why you should choose Merchant Money. Here’s six of them:

·         Get up to £500,000 to fund your business with your company or personal assets

·         Only pay interest until the day you settle, with no hidden charges or fees

·         90% of applicants approved

·         Top-ups are available if you consistently make repayments on time

·         We’re trusted by independent customer review sites such as Trustpilot

·         We’re fully authorised and regulated by the Financial Conduct Authority (FCA)


Are you in need of funding to drive your business forward? Get a quote for a Secured Business Loan from Merchant Money today.   

Merchant Money is a member of the Federation of Small Business (FSB) and a Patron of the National Association of Commercial Finance Brokers (NACFB). We are uncompromising in our principles and practice ethical and responsible lending at all times.

asked questions

When it comes to securing business finance, it’s vital to make an informed decision. We’ve answered some of the most commonly asked questions to help you in that task.

When do I qualify for a business loan?

We welcome all UK based sole traders, limited companies or partnerships. We require an annual turnover of £100,000 and a minimum of one year’s financial accounts.

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How much can I borrow?

Our Unsecured Business Loans vary from £5,000 to £150,000 and we offer Secured Business Loans up to £500,000. We also offer regulated business loans to sole traders up to £25,000.

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How long can I take the loan out for?

We offer terms from 3 to 36 months, You can always repay early. We only charge interest on the outstanding balance.

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