What is a secured business loan?
A secured business loan is a loan that’s backed by an asset, usually land or property, which the lender can take ownership of if the borrower is unable to repay.
It’s one of the most common types of finance available to UK businesses and is often used when large sums are involved or when the borrower is considered higher risk by traditional lenders.
How do secured loans work?
With a secured loan, you agree to offer a specific asset (called security) as collateral for the loan. The lender places a legal charge over that asset for the duration of the loan term.
If you make your agreed interest repayments and repay the capital in full at the end of the term, the charge is removed.
If repayments are not made and the loan defaults, the lender can legally enforce the charge by selling the asset to recover the outstanding amount.
What types of security are typically accepted?
At FOLK2FOLK, we accept a wide range of land and property assets as security, including:
- Residential property (excluding your main home)
- Commercial buildings
- Farmland and agricultural land
- Holiday lets or investment properties
- Development land (with or without planning)
We do not accept assets such as vehicles, machinery, or intellectual property as security.
Learn more: What Security Do I Need to Provide?
Why do businesses choose secured loans?
Secured loans can offer:
- Access to higher loan amounts — because the risk is backed by a tangible asset
- Lower interest rates than unsecured options like credit cards or overdrafts
- Flexible uses — including refinancing, growth, land purchase, and more
- Greater availability — particularly for businesses turned down by banks
At FOLK2FOLK, all our loans are secured, it’s one of the reasons we’ve been able to maintain a strong track record for both borrowers and investors.
Is a secured loan right for my business?
If you own land or property and need funding to grow, diversify, or stabilise your business, a secured loan may offer a straightforward solution especially when bank finance isn’t available or fast enough.
