Secured Business Loan
Type of funding?
A secured loan is arranged for a fixed period, typically over the expected life-span of the asset used to secure the loan. The loan can also cover a shorter period (e.g., less than 2 years)
Who is this suitable for?
Lenders will want to know details about the asset you own/want to purchase as well as how the funding will benefit your business. They may require an appraisal/valuation of the asset. Lenders are typically willing to lend up to 80% of the value of the asset
What are the key terms?
Costs vary significantly based on your credit rating, the quality of the asset, volume of lending and other factors. As a guide expect annualised costs to be around 7-15%
What are the key criteria to get funded?
- Provide an acceptable asset as security
- Value of asset is typically at least 125% of the loan amount
- Have equity/net assets in the business
- Often used to finance the purchase of the asset that serves as security
- Typically only used for medium-to longer term financing (18 months plus)
- Completion time varies significantly depending on the asset used to secure the loan