Commercial finance · Term lending
Secured business loans: borrowing a fixed sum against property or other assets
A secured business loan provides a lump sum repaid over an agreed term, with a charge over property or other business assets giving the lender recourse if repayments are not made. Ocean Capital Exchange introduces businesses to third-party lenders.
Definition
What a secured business loan is
A secured business loan is a term loan in which the borrower grants the lender a legal charge over specified assets, commonly property, so the lender can enforce against those assets if the loan is not repaid.
Security can allow lenders to consider larger amounts or longer terms than unsecured lending, but it puts the charged assets at risk.
Security may be first charge or second charge behind an existing lender, and may include a debenture over the business's wider assets.
At a glance
- Provides
- A lump sum repaid over a set term
- Security
- Charge over property or other assets; debentures possible
- Repayment
- Usually scheduled instalments; structures vary
- Rates
- Quote-specific; fixed or variable
- Key risk
- Charged assets can be enforced against on default
- OCE's role
- Introducer to third-party lenders; not a lender
Suitability
Which businesses it tends to suit
Secured lending suits businesses with assets to offer and a defined, longer-term use for funds.
Usually a fit
- Businesses or owners with property or substantial assets that can be charged.
- Larger one-off investments such as premises improvements, acquisitions or expansion.
- Refinancing existing debt into a single structured facility.
- Businesses with steady cash flow able to service regular repayments.
Usually not a fit
- Businesses unwilling to put property or key assets at risk.
- Short, small working-capital needs better met by other products.
- Situations where existing lenders will not consent to further charges.
- Businesses whose cash flow cannot reliably support scheduled repayments.
Process
How a secured loan works
Secured lending involves extra legal and valuation steps.
- 01
Define the need
Purpose, amount, term and the assets available as security.
- 02
Lender assessment
The lender reviews affordability, the business and the proposed security.
- 03
Valuation
The security is usually independently valued, at a cost to the borrower.
- 04
Legal work
Charges are drafted and registered; existing lenders may need to consent.
- 05
Drawdown
Funds are released once conditions are satisfied.
- 06
Repayment
You repay under the agreed schedule; the charge is released when repaid in full.
Comparison
Secured compared with unsecured lending
The main trade-off is security against flexibility.
| Secured loan | Unsecured loan | |
|---|---|---|
| Security | Charge over property or assets | No charge over specific assets; guarantees common |
| Set-up | Valuation and legal work usually needed | Generally simpler documentation |
| Typical use | Larger, longer-term investments | Smaller or shorter-term needs |
| Risk to borrower | Charged assets at risk | Guarantors personally at risk where given |
In practice
Typical uses
Common purposes include:
- Acquisitions
- Buying a business or a stake in one.
- Premises investment
- Refurbishment or expansion of property.
- Debt consolidation
- Refinancing several facilities into one.
- Major projects
- Larger capital investments with a long payback.
- Loan amountAssumed figure
- £150,000
- Monthly repayment at an assumed 9% a yearStandard amortising calculation, 60 payments
- £3,113.75
- Total repaymentsInterest element £36,825.20
- £186,825.20
- Assumed upfront fee
- £3,000.00
- Total cost of borrowingInterest plus upfront fee
- £39,825.20
Hypothetical arithmetic only. The 9% rate and £3,000 fee are assumptions to show the calculation, not typical or offered terms. Valuation and legal costs are excluded.
Weighing it up
Benefits and material limitations
Security changes what lenders may consider, and what you stand to lose.
Benefits
- Larger sums may be considered
- Security can support amounts lenders would not offer unsecured.
- Longer terms possible
- Repayments can be spread further, where agreed.
- Structured repayment
- A clear schedule aids planning.
Material limitations
- Assets at risk
- Default can lead to enforcement against charged property.
- Set-up costs
- Valuation and legal fees are typically payable whether or not the loan completes.
- Time to complete
- Valuation and legal work take time; no timescale can be promised.
- Existing lender consent
- Second charges may need consent from the first-charge lender.
- Early repayment charges
- May apply if you repay early.
- Covenants
- Agreements may impose financial or reporting conditions.
Due diligence
What lenders assess
Each lender applies its own criteria. Areas commonly reviewed include:
- Security value
- The value and type of property or assets offered.
- Existing charges
- Outstanding borrowing secured on the same assets.
- Affordability
- Whether cash flow supports repayments.
- Purpose
- What the loan is for and how it benefits the business.
- Track record
- Accounts and trading history.
- Directors
- Credit history and any guarantees offered.
Information often requested
- Details of property or assets offered as security
- Recent accounts and management accounts
- Cash-flow forecast
- Details of existing borrowing and charges
- Business bank statements
Indicative only. Lenders set their own requirements. Ocean Capital Exchange does not make lending decisions.
Pricing structure
Costs and repayment
Pricing is quote-specific. Look for:
- Interest
- Fixed or variable, on the outstanding balance.
- Arrangement fee
- Charged upfront or added to the loan.
- Valuation fee
- For valuing the security.
- Legal fees
- Your own and often the lender's.
- Early repayment charges
- If the loan is repaid before term.
- Exit fees
- Charged on final repayment under some agreements.
Repayment and settlement
- Most loans are repaid by monthly amortising instalments.
- Some structures include interest-only periods or a final lump sum.
- Missed payments can lead to default charges and enforcement.
- The charge is released only once the loan is repaid in full.
Checklist for comparing quotes
- 1.Total amount repayable
- 2.All fees including valuation and legal
- 3.Fixed or variable rate
- 4.Early repayment and exit charges
- 5.Covenants and reporting
- 6.Scope of security and guarantees
Repayment illustration
Estimate repayments on a term loan
The first tool models the quoted rate type, repayment structure, security value, existing secured debt and relevant fees, showing repayments and indicative security headroom. The separate simple model below uses a fixed annual nominal rate, equal monthly repayments and an upfront fee paid separately; it excludes interest-only periods and changing rates. Required money and rate inputs start blank. These are alternative illustrations, not costs to add together or a lender's security assessment.
Your property or other assets used as security may be at risk if repayments are not kept up.
Repayments and security headroom
Enter your loan amount, annual rate, term — number of repayments, upfront arrangement fees, estimated security value, existing debt secured on these assets to see the breakdown.
3 of 9 required figures entered
Illustrative only, not a binding finance offer. Costs vary by lender and applicant; additional fees may apply and eligibility is subject to assessment. Ocean Capital Exchange is an introducer, not the lender. Product-specific regulatory disclosures require review before production. Assets or property used as security may be at risk if repayments are not maintained. Valuation, security charges and lending decisions require assessment. Your property or other assets used as security may be at risk if repayments are not kept up. How this calculator works.
Discuss secured funding options
Speak to our team whenever you’re ready. You don’t need to complete this calculator to discuss your options or request a quote.
Our enquiry form opens in a new tab. Calculator figures are not sent automatically; include any you would like us to review.
Alternative: simple monthly repayment model
Illustrative result
Complete every field to see a result.
0 of 4 required figures entered
Ocean Capital Exchange is an introducer, not a lender or issuing bank. Check the actual repayment schedule, all charges and security obligations with the provider before committing.
Want to discuss these figures? Open our enquiry form (opens in a new tab). Calculator figures are not transferred automatically, so please include any you want us to review.
Secured loan questions
Still unsure? Call +44 20 7183 2026.
What can be used as security?
Commonly commercial or residential property, and sometimes other business assets. Lenders decide what they will accept.
Can I get a second-charge loan?
Some lenders lend behind an existing first charge, usually subject to the first lender's consent.
What is a debenture?
A charge over a company's assets more broadly, which some lenders take alongside or instead of a property charge.
What happens if I cannot repay?
The lender can take enforcement action against the charged assets under the agreement, which could include selling them.
Are there costs if the loan does not go ahead?
Valuation and some legal fees may be payable regardless. Check before instructing.
Can I repay early?
Often, but early repayment charges may apply.
Will I need a personal guarantee as well?
Some lenders request one in addition to security.
Independent background reading
These independent sources explain general concepts. They do not endorse Ocean Capital Exchange or confirm our providers, product availability or terms. Your provider’s agreement takes precedence over an illustration.
Important information
Ocean Capital Exchange Ltd introduces businesses to third-party providers of secured business loans. We are not a lender, do not make credit decisions and do not guarantee that finance will be offered or on what terms. Any facility is subject to the provider's own assessment, due diligence, approval and documentation.
Property or other assets used as security may be repossessed or sold if you do not keep up repayments.
This page is general information, not financial, legal or tax advice. Worked examples and calculator results are hypothetical arithmetic based on assumed or visitor-entered figures; they are not quotes, offers or typical terms. Business finance may require security or personal guarantees. Read any agreement carefully and take independent advice where appropriate.
Discuss secured borrowing
Tell us the purpose, the amount and what security is available. We can explain the considerations and introduce suitable lenders.
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- +44 20 7183 2026
- Office
- 73 Watling Street, London, EC4M 9BJ