What can my company use as security for a business loan?

The most common security is commercial property that the company owns, either freehold or a valuable long leasehold. Lenders also take charges over plant and machinery, business vehicles, the debtor book, stock, and cash. Larger facilities are usually secured by a debenture, a floating charge over the whole of the company's assets and undertaking. Some lenders will accept directors' personal property as additional security, but that converts part of the exposure into personal risk and should be weighed carefully.

What is a debenture and what does it give the lender?

A debenture is a legal document that grants the lender a charge over the company's assets to secure the debt. It can be a fixed charge over specific named assets such as property or machinery, a floating charge over changing assets like stock and debtors, or both. Once registered at Companies House within 21 days of creation, it gives the lender priority over unsecured creditors if the company fails. A debenture often also lets the lender appoint an administrator, so it is a powerful instrument, not a formality.

Are secured business loans cheaper than unsecured ones?

Usually yes. Because the lender can recover from a charged asset if the company defaults, its risk is lower, so it prices the loan at a lower margin. Secured facilities also allow larger amounts and longer terms, sometimes 15 to 25 years against commercial property, versus one to six years unsecured. The trade-off is a slower, more expensive setup involving valuation and legal work, plus the real risk of losing the asset. For small or fast requirements, unsecured can still be the better fit.

How long does a secured business loan take to arrange?

Expect several weeks rather than days. Unsecured loans can complete in 24 to 72 hours, but a secured facility needs a professional valuation of the asset, legal work to create and register the charge, and often searches and title checks on property. A straightforward charge over commercial premises might complete in three to six weeks. A more complex debenture, a second charge, or a portfolio of properties can take longer. If speed is critical, that is a reason to consider an unsecured or bridging alternative.

What happens if my company defaults on a secured loan?

If the company breaches the terms and cannot cure the default, the lender can enforce its security. For a fixed charge over property or plant, that means taking possession and selling the asset to recover the debt. Under a debenture the lender may appoint an administrator or receiver over the whole company. Any shortfall after the sale remains owed by the company, and if directors gave personal guarantees, the lender can pursue them personally for that balance. Enforcement is a last resort, but the powers are real.

Can a lender take my home for a company loan?

Only if you sign a personal guarantee or give a charge over personal property as additional security. The loan itself is to the company and secured on company assets. However, lenders often ask directors of smaller companies for a personal guarantee, and some ask for a charge over a director's own property. If you grant that, your home becomes exposed. Read what you are signing, take independent legal advice, and never assume company borrowing is ring-fenced from your personal position when a guarantee is involved.

How much can my company borrow on a secured loan?

The ceiling is driven by the value of the security and the lender's loan-to-value limit. Against commercial property, lenders commonly advance 60% to 75% of the valuation, so a property valued at £500,000 might support £300,000 to £375,000. Plant, vehicles and debtor books attract lower loan-to-value ratios because they depreciate or fluctuate. Affordability still matters: the company must show it can service the repayments from trading cash flow, so a strong asset alone does not guarantee the full amount.

Is a secured business loan regulated?

An introduction of a UK limited company to a lender for business-purpose borrowing is not a regulated activity under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, because the borrower is a body corporate. We introduce your company to a panel of commercial-finance brokers; we are not a lender and do not give regulated credit advice. Borrowing by a sole trader, an individual, or for personal or household purposes can be regulated consumer credit and needs an FCA-authorised firm.

Can I get a secured loan on property my company does not fully own?

Yes, through a second charge. If the property already has a mortgage, a lender can take a second-ranking charge behind the existing one, lending against the equity above the first charge. Rates on second charges are higher because the lender recovers only after the first charge is repaid on a sale. The first-charge lender's consent is usually needed. Second charges are useful when refinancing the whole property would trigger early-repayment penalties on the existing loan.

Secured loan or asset refinance, what is the difference?

A secured loan gives the lender a charge over an asset you keep using and owning, in exchange for a cash advance. Asset refinance, also called sale and leaseback, involves the lender effectively buying an asset you already own outright and leasing it back to you, releasing its value as cash. Both unlock capital tied up in assets, but refinance is structured through an asset-finance agreement rather than a loan and charge. The right route depends on the asset type and how the cash is treated for tax.

Will a secured loan appear on public record?

Yes. Any charge a company grants over its assets must be registered at Companies House within 21 days, and the register is public. Anyone, including your suppliers, customers and other lenders, can see that a charge exists and which lender holds it, though not the loan amount or terms. This is normal and expected for company borrowing. It does mean a heavily charged balance sheet is visible to future lenders, which can affect how much additional unsecured credit the company can raise later.

Is the interest on a secured business loan tax-deductible?

Interest on borrowing taken out wholly and exclusively for the company's trade is generally an allowable deduction against corporation tax, reducing taxable profits. Arrangement and valuation fees linked to the loan usually follow the loan-relationship rules for companies. The capital repayments themselves are not deductible, only the interest and finance costs. The exact treatment depends on the purpose of the loan and how it is recorded, so confirm it with your accountant. See our corporation tax guidance for how interest deductions interact with the marginal relief band.

Secured Business Loans UK: Rates & Security

Written by Emma Carter

Editorial Lead · Published 30 July 2026

Reviewed by James Holloway, BSc Accounting and Finance

Technical accuracy review · Every figure, rate and procedural statement verified against current HMRC source

Editorial content from the Holloway Davies team. For decisions specific to your business, book a call.

TL;DR

A secured business loan lets your limited company borrow larger sums at lower rates by giving the lender a legal charge over an asset, usually commercial property, plant or the whole business. This guide covers what can be used as security, why the rate is cheaper, the valuation and legal timeline, what a debenture actually gives the lender, and what happens if the company defaults. Written for company directors and finance leads, not personal borrowers.

What a Secured Business Loan Actually Is

A secured business loan is company borrowing where the lender takes a legal charge over one or more of your company's assets. If the loan is repaid as agreed, the charge is released and nothing happens to the asset. If the company defaults and cannot put it right, the lender can enforce the charge, which usually means selling the asset to recover what it is owed.

That single feature, the charge, changes everything about the loan. Because the lender has a fallback if trading goes wrong, it takes on less risk. Lower risk means a lower interest margin, larger amounts, and longer terms than an unsecured facility would offer the same company. In return, the company accepts a slower, more involved setup and the genuine possibility of losing the asset.

The charge is created through a legal document, most often a debenture for larger facilities or a legal charge over a specific property. It must be registered at Companies House within 21 days of creation, and the register is public. This is the top of the company debt cluster in practical terms: for the full menu of company borrowing, including unsecured, revolving and government-backed options, see our business loans guide.

What Your Company Can Put Up as Security

Almost any asset with a resale value can secure a loan, but lenders prefer assets that are easy to value and easy to sell. In rough order of how much they like them:

Commercial property. The gold standard. Freehold or a strong long leasehold owned by the company supports the largest advances and the lowest rates, often over a 15 to 25 year term.
Plant and machinery. Named, identifiable equipment can carry a fixed charge. Because it depreciates, the loan-to-value is lower than property.
Vehicles and fleet. Usually financed through dedicated asset finance rather than a general secured loan, but they can form part of the security pool.
The debtor book and stock. Captured by a floating charge in a debenture. Values move daily, so lenders discount them heavily unless the funding is a dedicated invoice or stock facility.
The whole business (an all-assets debenture). A fixed and floating charge over everything the company owns and everything it acquires in future. This is standard for a substantial term loan.

Some lenders will also ask a director to add personal property or a personal guarantee as extra comfort, particularly for younger or thinly capitalised companies. Be clear about what that means before you sign. A personal guarantee moves part of the risk off the company's balance sheet and onto you personally, which defeats much of the point of trading through a limited company.

Why Secured Loans Are Cheaper and Larger

The pricing logic is straightforward. An unsecured lender relies entirely on the company's trading strength and, usually, a personal guarantee. If the company fails, the lender joins the queue of unsecured creditors and often recovers little. A secured lender holds a charge, so on a default it can sell a specific asset ahead of that queue. Its expected loss is far smaller, and the interest rate reflects that.

The same logic drives the amount. Lenders size a secured advance against the value of the asset using a loan-to-value (LTV) ratio. On commercial property, 60% to 75% LTV is common, so a building valued at £500,000 might support £300,000 to £375,000 of borrowing. Depreciating or fluctuating assets such as plant, vehicles and debtors attract lower LTVs. Crucially, a strong asset is necessary but not sufficient: the company must still show it can service the repayments from trading cash flow. Affordability and security are two separate tests, and both have to pass.

Valuation and the Legal Process

The cost of the lower rate is time and setup work. A secured loan cannot complete as quickly as an unsecured one, because the lender needs to establish that the security is real, correctly valued and enforceable. Expect the following:

Professional valuation. A qualified surveyor values commercial property; an asset valuer assesses plant. The company usually pays for this.
Legal work. Solicitors draft the charge or debenture, run title and search checks on property, and confirm the company has the power to grant the security. Both sides often have separate lawyers.
Charge registration. The charge is registered at Companies House within 21 days of creation, and any property charge is also noted at the Land Registry.
Consents. If there is an existing charge (for a second charge) or a landlord (for leasehold), their consent may be needed.

A clean first charge over owned commercial premises might complete in three to six weeks. A second charge, a portfolio of properties, or a complex debenture can take longer. If your company needs cash in days rather than weeks, that timeline is itself a reason to look at an unsecured business loan or a bridging facility instead.

Worked Example: £250,000 Secured vs Unsecured

Consider a trading company that owns its commercial premises, valued at £450,000 with no existing mortgage, and needs £250,000 to fund an expansion. Compare the two routes on the same £250,000.

Feature	Secured (first charge on premises)	Unsecured
Loan-to-value	56% of a £450,000 property, comfortable	No asset test; based on trading strength
Indicative rate	Lower, single-digit margin over base	Higher, often several points more
Typical term	Up to 15 to 20 years	1 to 6 years
Monthly repayment	Lower, spread over a long term	Higher, compressed into a short term
Personal guarantee	Often reduced or avoided given the charge	Almost always required in full
Speed to funds	3 to 6 weeks (valuation and legal)	Often 24 to 72 hours
Likelihood of approval at £250k	Strong, backed by tangible security	Harder; many lenders decline or reprice

The pattern is consistent. At £250,000, the secured route usually wins on rate, term and approval odds, and the long term keeps the monthly cost manageable. Many lenders would decline a £250,000 unsecured request from a mid-sized company outright, or approve only at a materially higher rate over a short term that strains cash flow. The unsecured route wins only where speed matters more than cost, or where the company has no asset to charge. To model the monthly cost of either route with your own figures, use our business loan calculator.

What Happens if the Company Defaults

This is the part borrowers skate over, and it is the part that matters most. Granting security is not a formality. It hands the lender real power that it can use if the company breaches the agreement and cannot cure the breach.

On a default, a lender holding a fixed charge over property or named plant can take possession of that asset and sell it to recover the debt. A lender holding a debenture (fixed and floating charge over the whole company) can go further and appoint an administrator or receiver over the business itself. Because the charge is registered, the secured lender ranks ahead of the company's unsecured creditors on any recovery.

Two points that catch directors out. First, if the sale of the asset does not clear the debt, the shortfall is still owed by the company. Second, if directors signed personal guarantees, the lender can pursue them personally for that shortfall, which is how company borrowing reaches a director's own home. Enforcement is a last resort that lenders would rather avoid, but the powers in the debenture are enforceable, so borrow against an asset only when the repayments genuinely fit the company's cash flow.

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Secured vs Unsecured vs Asset Refinance

Secured lending is one of three ways a company can raise sizeable debt against its strength or its assets, and they are not interchangeable.

Secured loan. The lender takes a charge over an asset the company keeps owning and using, and advances cash. Best for larger, longer-term borrowing where a good asset exists and cost matters more than speed.
Unsecured loan. No charge; approval rests on trading strength and usually a personal guarantee. Faster and simpler, but smaller, shorter and dearer. Covered in full in our unsecured business loans guide.
Asset refinance (sale and leaseback). Rather than charging an asset you keep, the lender effectively buys an asset the company owns outright and leases it back, releasing its value as cash. This is structured as an asset-finance agreement, not a loan, and the tax treatment differs. See our asset finance guide for refinance and sale-and-leaseback mechanics.

A rough rule: if you want to keep the asset and simply borrow against it, a secured loan fits. If you want to convert an owned asset into working cash and are relaxed about how it is held, asset refinance can release more. If speed and simplicity beat everything, unsecured wins despite the higher rate. Many companies use a blend, for example a secured term loan for the big capital need and a revolving facility for day-to-day swings.

The Tax Angle, in One Paragraph

Interest on a loan taken out wholly and exclusively for the company's trade is generally deductible against corporation tax, reducing taxable profits under the loan-relationship rules. The capital repayments are not deductible, only the interest and eligible finance costs such as arrangement fees. That matters most for companies whose profits sit in the 26.5% marginal-relief band between £50,000 and £250,000, where every pound of deduction is worth more. We do not re-explain the tax here; for how interest deductions interact with your effective rate, see corporation tax marginal relief, and confirm the specific treatment with your accountant.

Who Secured Lending Suits, and How to Apply

A secured business loan is the right tool when your company owns a good asset (commercial property above all), needs a larger sum than an unsecured lender will comfortably offer, wants a lower rate and a longer term, and can wait a few weeks for the valuation and legal process. It is the wrong tool when you need cash in days, have no chargeable asset, or the amount is small enough that unsecured is cleaner.

To apply, a lender will want the security details and valuation, recent statutory accounts and management accounts, a clear statement of purpose, and evidence the company can service the repayments from trading cash flow. Because rates, LTVs and appetite vary widely between banks, challenger lenders and specialist secured lenders, the practical route is to compare the whole market rather than approach one bank.

That is where the introduction works. Tell us the amount, the asset available as security, and the purpose, and we will pass your company to our panel of commercial-finance brokers, who source competing secured quotes. We are not a lender; we introduce limited-company borrowers to the panel. If the question is really about how the borrowing is taxed or how to structure the purchase it funds, our accountants at Holloway Davies can advise on that separately. Use the form below to start; the first question confirms your company is a limited company, because these introductions are for company borrowers only.

For broader working-capital needs where a secured term loan is not the obvious answer, our working capital finance guide maps the cash-flow gap to the right product.

Authoritative Sources

Frequently asked questions

What can my company use as security for a business loan?: The most common security is commercial property that the company owns, either freehold or a valuable long leasehold. Lenders also take charges over plant and machinery, business vehicles, the debtor book, stock, and cash. Larger facilities are usually secured by a debenture, a floating charge over the whole of the company's assets and undertaking. Some lenders will accept directors' personal property as additional security, but that converts part of the exposure into personal risk and should be weighed carefully.
What is a debenture and what does it give the lender?: A debenture is a legal document that grants the lender a charge over the company's assets to secure the debt. It can be a fixed charge over specific named assets such as property or machinery, a floating charge over changing assets like stock and debtors, or both. Once registered at Companies House within 21 days of creation, it gives the lender priority over unsecured creditors if the company fails. A debenture often also lets the lender appoint an administrator, so it is a powerful instrument, not a formality.
Are secured business loans cheaper than unsecured ones?: Usually yes. Because the lender can recover from a charged asset if the company defaults, its risk is lower, so it prices the loan at a lower margin. Secured facilities also allow larger amounts and longer terms, sometimes 15 to 25 years against commercial property, versus one to six years unsecured. The trade-off is a slower, more expensive setup involving valuation and legal work, plus the real risk of losing the asset. For small or fast requirements, unsecured can still be the better fit.
How long does a secured business loan take to arrange?: Expect several weeks rather than days. Unsecured loans can complete in 24 to 72 hours, but a secured facility needs a professional valuation of the asset, legal work to create and register the charge, and often searches and title checks on property. A straightforward charge over commercial premises might complete in three to six weeks. A more complex debenture, a second charge, or a portfolio of properties can take longer. If speed is critical, that is a reason to consider an unsecured or bridging alternative.
What happens if my company defaults on a secured loan?: If the company breaches the terms and cannot cure the default, the lender can enforce its security. For a fixed charge over property or plant, that means taking possession and selling the asset to recover the debt. Under a debenture the lender may appoint an administrator or receiver over the whole company. Any shortfall after the sale remains owed by the company, and if directors gave personal guarantees, the lender can pursue them personally for that balance. Enforcement is a last resort, but the powers are real.
Can a lender take my home for a company loan?: Only if you sign a personal guarantee or give a charge over personal property as additional security. The loan itself is to the company and secured on company assets. However, lenders often ask directors of smaller companies for a personal guarantee, and some ask for a charge over a director's own property. If you grant that, your home becomes exposed. Read what you are signing, take independent legal advice, and never assume company borrowing is ring-fenced from your personal position when a guarantee is involved.
How much can my company borrow on a secured loan?: The ceiling is driven by the value of the security and the lender's loan-to-value limit. Against commercial property, lenders commonly advance 60% to 75% of the valuation, so a property valued at £500,000 might support £300,000 to £375,000. Plant, vehicles and debtor books attract lower loan-to-value ratios because they depreciate or fluctuate. Affordability still matters: the company must show it can service the repayments from trading cash flow, so a strong asset alone does not guarantee the full amount.
Is a secured business loan regulated?: An introduction of a UK limited company to a lender for business-purpose borrowing is not a regulated activity under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, because the borrower is a body corporate. We introduce your company to a panel of commercial-finance brokers; we are not a lender and do not give regulated credit advice. Borrowing by a sole trader, an individual, or for personal or household purposes can be regulated consumer credit and needs an FCA-authorised firm.
Can I get a secured loan on property my company does not fully own?: Yes, through a second charge. If the property already has a mortgage, a lender can take a second-ranking charge behind the existing one, lending against the equity above the first charge. Rates on second charges are higher because the lender recovers only after the first charge is repaid on a sale. The first-charge lender's consent is usually needed. Second charges are useful when refinancing the whole property would trigger early-repayment penalties on the existing loan.
Secured loan or asset refinance, what is the difference?: A secured loan gives the lender a charge over an asset you keep using and owning, in exchange for a cash advance. Asset refinance, also called sale and leaseback, involves the lender effectively buying an asset you already own outright and leasing it back to you, releasing its value as cash. Both unlock capital tied up in assets, but refinance is structured through an asset-finance agreement rather than a loan and charge. The right route depends on the asset type and how the cash is treated for tax.
Will a secured loan appear on public record?: Yes. Any charge a company grants over its assets must be registered at Companies House within 21 days, and the register is public. Anyone, including your suppliers, customers and other lenders, can see that a charge exists and which lender holds it, though not the loan amount or terms. This is normal and expected for company borrowing. It does mean a heavily charged balance sheet is visible to future lenders, which can affect how much additional unsecured credit the company can raise later.
Is the interest on a secured business loan tax-deductible?: Interest on borrowing taken out wholly and exclusively for the company's trade is generally an allowable deduction against corporation tax, reducing taxable profits. Arrangement and valuation fees linked to the loan usually follow the loan-relationship rules for companies. The capital repayments themselves are not deductible, only the interest and finance costs. The exact treatment depends on the purpose of the loan and how it is recorded, so confirm it with your accountant. See our corporation tax guidance for how interest deductions interact with the marginal relief band.

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Secured Business Loans: How Company Borrowing Against Assets Works

What a Secured Business Loan Actually Is

What Your Company Can Put Up as Security

Why Secured Loans Are Cheaper and Larger

Valuation and the Legal Process

Worked Example: £250,000 Secured vs Unsecured

What Happens if the Company Defaults

Want this checked against your specific situation?

Secured vs Unsecured vs Asset Refinance

The Tax Angle, in One Paragraph

Who Secured Lending Suits, and How to Apply

Authoritative Sources

Frequently asked questions

Need an accountant who actually picks up the phone?

Equipment and Machinery Finance for Limited Companies

Invoice Discounting for UK Limited Companies: How Confidential CID Works

Invoice Factoring for UK Limited Companies: Costs, Traps and How It Works

Secured Business Loans: How Company Borrowing Against Assets Works

What a Secured Business Loan Actually Is

What Your Company Can Put Up as Security

Why Secured Loans Are Cheaper and Larger

Valuation and the Legal Process

Worked Example: £250,000 Secured vs Unsecured

What Happens if the Company Defaults

Want this checked against your specific situation?

Secured vs Unsecured vs Asset Refinance

The Tax Angle, in One Paragraph

Who Secured Lending Suits, and How to Apply

Authoritative Sources

Frequently asked questions

Need an accountant who actually picks up the phone?

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Invoice Discounting for UK Limited Companies: How Confidential CID Works

Invoice Factoring for UK Limited Companies: Costs, Traps and How It Works