Secured vs Unsecured Loans

Business finance falls under two main categories: secured and unsecured. Choosing the right one is an important step to getting the right loan for your business. Secured loans require security whereas unsecured ones don’t.

Secured vs Unsecured Loans
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  • Get access to 120+ lenders

What is a Secured Loan vs an Unsecured Loan?

Secured loans are based on valuable items owned by your business; the lender takes a charge over the asset and if you stop making repayments and sell it to recover their costs. Unsecured loans aren't based on any security, so the lender assesses your overall business position more closely and will be looking for strong profitability.

How do Secured and Unsecured Loans work?

Because they're based on a tangible asset, secured loans are often cheaper than unsecured loans, and other aspects of your business performance aren't as important.

Secured loans: 

  • Based on an asset

  • You can borrow between 50-75% of the asset's value

  • You still own the asset

  • Often easier to get, and cheaper, than unsecured finance

Without tangible assets involved, unsecured loans can be more difficult to get than secured loans, and you often have to give a personal guarantee. 

Unsecured loans:

  • No need to own assets

  • Faster to arrange than secured loans (no valuations necessary)

  • Borrow up to 25% of annual turnover

  • Potentially more expensive than secured loans

Secured vs Unsecured Loans - Features and benefits through Funding Options

  • Secured and unsecured flexible finance options available subject to eligibility

  • We compare 120+ lenders to find the right finance for you

  • A dedicated Business Finance Specialist will guide you through the process

  • It’s free, no obligation and won’t affect you credit score

Financial product information

Representative example*

7.63% APR Representative based on a loan of £50,000 repayable over 24 months. Monthly repayment of £2,252.94. The total amount payable is £54,070.56

*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.

Annual Percentage Rate

Rates from 2.75% APR

Repayment period

1 month to 30 years terms

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