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What is a secured business loan?

Secured business loans are a way for SMEs to receive an injection of cash by using items owned by a business as security. Because lenders use commercial assets to secure a loan, it means they can lend a lot more when compared to unsecured business loans, which use different criteria, sometimes as much as £2 million. Because lenders user assets to secure the loan, many don’t need to use harder credit checks during the application process.

Have you thought about Invoice Finance as a cash flow solution for your business?

Invoice finance allows you to release cash quickly from your unpaid invoices.

As your lender, we can release up to 90% of your invoices within 24 hours. On payment of the invoice from your customers, we will then release the final amount minus any fees and charges. There are different types of invoice financing options available such as factoring (mainly invoice factoring and debt factoring) and invoice discounting to businesses depending on the situation and the level of control they require in collecting unpaid invoices.

We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our confidential invoice discounting solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.

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How do secured business loans work?

Using existing commercial assets such as property, machinery or vehicles, lenders will secure the amount they lend against an item owned by the business as security. This means that if something should go wrong and a business struggles to meet its monthly repayments, the lender can sell the assets in order to recoup the money they’ve lent.

Is a secured business loan right for my business?

Secured business loans allow SMEs to borrow more money across a longer period of time than unsecured loans, providing a great option for businesses looking for medium term funding. The fact they don’t use detailed credit checks makes them a good option for businesses with no or bad credit history.

What are the advantages and disadvantages of secured business loans?

Advantages of secured business loans:

  • They are less risk to the lender so often cheaper than unsecured equivalents
  • The more assets you have, the bigger the amount you can potentially borrow
  • No requirement for personal assets to secure funding
  • As the asset is the main focus of the loan, there is less focus on credit history

Disadvantages of secured business loans:

  • If your business goes through a tricky period and you miss payments, you will lose your assets as the lender will sell them to recoup their losses

Get in touch

Contact our friendly UK advisors on our freephone

0808 250 0859

8:45 - 17:15 - Monday to Thursday &
8:45 - 16:45 - Friday

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The benefits of invoice finance companies such as Novuna Business cash flow

  • Boost your cash flow without having to wait up to 120 days for your customers to pay you

  • Release up to 90% of the invoice straight away, and the final 10% when the invoice is settled

  • Access funds within 24 hours from initial appointment with our revolutionary digital onboarding process

  • Benefit from our in-house credit control processes, allowing you to focus on running your business, instead of chasing clients for payment

  • Six month trial period followed by a rolling contract

Want to understand more Cash Flow Finance terms?

Our Cash Flow Resource Hub has been set up to help SME's with cash flow finance advice, tips and resources to help with their cash flow position.

We explore ways you can begin improving your cash flow situation and start getting your business on track to positive cash flow.

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If your customers are consumers, please contact our consumer finance division.

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