Property-backed funding for larger business requirements
Secured Business Loans
A secured business loan allows a business to raise funding using property as security. By providing additional security to the lender, businesses may be able to access larger funding amounts, longer repayment terms or more competitive pricing than may be available through unsecured business finance.
Principal Business Finance can help UK businesses explore property-backed business loans for a wide range of commercial purposes, including growth, acquisitions, working capital, refinancing and investment.
What Is a Secured Business Loan?
A secured business loan is commercial finance where the lender takes security over an asset, typically residential, commercial or investment property.
Depending on the lender and circumstances, security could potentially include:
- Commercial property
- Residential property
- Buy-to-let or investment property
- Semi-commercial property
- Other suitable property assets
The amount available will typically depend on factors including the property’s value, existing borrowing secured against it, the business’s financial position and the lender’s criteria.
What Are the Benefits of a Secured Business Loan?
Using property as security can provide several potential benefits:
Larger funding amounts
Longer repayment terms
Potentially lower rates
Flexible use of funds
Unlock property equity
Alternative to selling assets
What Can a Property-Backed Business Loan Be Used For?
A property-backed business loan can potentially be used for a wide range of business purposes, including:
- Working capital and cash flow
- Business expansion
- Purchasing stock
- Acquiring another business
- Refurbishments and improvements
- Purchasing equipment or machinery
- Refinancing existing business debt
- Funding new contracts or projects
- Investing in additional premises
- Other commercial expenditure
This flexibility can make secured lending particularly useful where a business requires a larger amount of capital or a longer repayment period.
First and Second Charge Business Loans
Depending on the existing borrowing against a property, secured business finance may be available on a first or second charge basis.
This can potentially allow property owners to access existing equity without replacing their current mortgage.
First charge
A first charge is generally used where there is no existing mortgage or secured lender taking priority over the property.
Second charge
A second charge business loan may allow additional capital to be raised against a property that already has a mortgage, subject to sufficient equity, lender criteria and any required consent.
How Much Can My Business Borrow?
The amount available will depend on the individual transaction and lender.
Finance providers may consider factors such as:
- Property value
- Available equity
- Existing mortgages
- Loan amount
- Business turnover
- Profitability
- Cash flow
- Credit profile
- Purpose of funding
- Affordability
A property valuation and additional supporting information may be required as part of the application.
Why Principal Business Finance?
Principal Business Finance works with a range of commercial finance providers offering secured and property-backed business finance.
We take the time to understand your funding requirement, business circumstances and available security before exploring suitable options from our lender panel.
Whether you’re looking to release equity, fund business growth, refinance existing borrowing or raise additional working capital, our team can support the application from initial enquiry through to completion.
Looking to Raise Business Finance Against Property?
Speak to Principal Business Finance today about a Secured Business Loan.
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