What is a Secured Business Loan?

What Is a Secured Business Loan?

A secured loan is backed by property, like a commercial building, investment property, or home. Because the lender has an asset as security, they usually offer:

• Lower interest rates – saving you money over time
• Larger loan amounts – ideal for expansion or big projects
• Longer repayment terms – up to 25 years for manageable monthly payments
• Easier approval – especially if you already own property

Keep in mind: Your property is tied to the loan, a professional valuation is required, and future property plans may be affected.

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What Is an Unsecured Business Loan?

Unsecured loans don’t require property. Lenders assess your credit score, cash flow, and business performance. They are usually faster to arrange but have limitations:

Advantages:

• No property at risk
• Quicker approval
• Good for smaller funding needs

Limitations:

• Higher interest rates
• Smaller loan amounts
• Stricter eligibility
• Shorter repayment terms

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How to Decide

• Size of investment: Large expansions or acquisitions often need secured loans
• Cost: Secured loans are cheaper for bigger sums over time
• Property ownership: Owning property can unlock affordable funding
• Cash flow: Longer terms and lower rates reduce monthly pressure

Many businesses use secured loans to expand, acquire competitors, invest in technology, or support cash flow during challenging periods.

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Making the Right Choice

• Need a large amount of funding → secured loans are usually best
• Need smaller or short-term funding → unsecured loans may suffice

Always check fees, terms, and repayment schedules. A financial adviser can help you choose the option that aligns with your business goals.

The right loan can support growth, manage risk, and create opportunities for your business.