Secured Business Loans

As a commercial finance provider dedicated to helping SMEs reach their growth potential, we know just how vital secured business loans are for enabling businesses across all industries to succeed in achieving their strategic goals.

A secured business loan can open your business up to a whole new level of funding. It also allows you to pursue any number of avenues in your strategic development, be it expansion, acquisition or simply bolstering cash flow – all by “unlocking” cash tied up within your business. However, because of the collateral asset requirements behind any secured loan, it’s a process you need to approach in a careful and considered manner.

We provide secured loans for small businesses that have the credibility, expertise, and credit capabilities of a traditional bank behind them, while offering the speed, flexibility, and manageability of an alternative lender. If you think a secured business loan could be the next logical step for your business, read on to find out about the benefits and the process behind secured funding, as well as an analysis on whether it’s the right move for you.

What is a secured business loans and their role in business?

Secured business loans are a type of financing where the borrower offers a valuable asset, such as a commercial or residential property, as collateral to the lender. This security reduces the lender’s risk, allowing them to offer more favourable loan terms such as lower interest rates and higher borrowing limits. 

These loans can play a crucial role in helping businesses access the funds they need for various purposes. Whether it turns out to be working capital, growth and expansion projects, purchasing equipment, or managing unexpected expenses, this facility is versatile and can prove to be a great resource. Secured loans can be particularly beneficial for businesses that may not qualify for unsecured lending due to numerous factors, though typically in cases of limited credit history or a lack of financial stability. 

We offer tailored secured business loans to suit a wide range of businesses and their unique financial needs. Our flexible repayment terms, competitive rates, and expert guidance ensure that our clients receive a financing solution that supports their growth and long term success. 

What types of businesses could benefit from a secured commercial loan? 

A wide range of businesses across various sectors and at different stages of development can benefit from a secured commercial loan. Nucleus has a proven track record of successful partnerships, and we offer finance to companies of any age. You can see examples of those we’ve worked with in our client stories. 

Other examples of businesses that can take particular advantage of this type of funding include: 

Tech Startups: Technology companies often require significant initial investment to develop their ideas and bring them to market. We can provide the capital needed for research and development, recruiting top talent, and procuring essential pieces of equipment. 

Property Developers: Secured commercial loans can provide property developers with the funds needed for purchasing land, financing construction projects, or refurbishing existing properties. Our competitive rates and flexible terms make it easier for developers to manage their cash flow and complete projects on time and within budget. 

Fast Growing Retailers: As retailers experience rapid growth, they may require additional funds to open new stores, enhance the products they offer, or increase their marketing efforts. Nucleus can offer the financial support necessary for these businesses to scale and succeed in a competitive market. 

Manufacturing Companies: Businesses in the manufacturing sector typically face large capital expenses, whether for machinery, inventory or new production facilities. We can help these companies secure the capital needed to grow and keep up with increasing demand. 

Service Providers: Companies offering services such as consulting, marketing, or professional services can also benefit from our secured commercial loans. These loans can help them invest in new technology, hire additional staff, or expand their client base. 

How much small business funding can I borrow? 

We understand that every business has unique financial needs and aspirations, so that’s why we offer a flexible range of secured business loans to accommodate various requirements. You can apply for a loan amount between £25,000 and £2m, with a loan to value (LTV) ratio of up to 70% for residential properties and 65% for commercial properties. This wide range of funding options ensures you can secure the necessary funds to cover various aspects of your business, be it daily operations or long term growth projects.

For businesses requiring funds for everyday running costs, our secured loans can provide the working capital needed to manage cash flow, pay suppliers, or cover unforeseen expenses. Our competitive rates and flexible repayment terms make it easier for you to manage your financial obligations while focusing on core operations. 

If you are looking to support a long term growth project, such as expanding your product line, opening new locations, or investing in marketing campaigns, our facilities can offer the substantial financial backing necessary to pursue these ambitions. With access to larger loan amounts and favourable interest rates, you can confidently invest in growth without compromising financial stability. 

Can I get a business loan with no money down? 

While business loans do not technically require ‘money down’, when it comes to a secured loan, you will need to provide a valuable asset as collateral, which may have required prior investments on your part. So although the loan itself does not require an upfront payment, it’s likely that you have made a financial commitment in the past to secure the asset being used as collateral. 

If you are lacking assets to secure your loan against, it is always worth exploring other loan options. If you would like to discuss any of our facilities, we ask that you contact us at any time on – 020 7839 1980 – alternatively you can request a call back at a time more convenient to you. 

What business loan rates are available? 

We aim to offer competitive rates to help enterprises access the funding they need without putting undue financial strain on their operations. By using your commercial or residential property as collateral, you can unlock better loan rates and enjoy more affordable borrowing options. 

Our pricing starts at 1% per month for standard secured term loans and interest only loans with a duration of up to five years. These attractive rates can make a significant difference in the overall cost of borrowing, allowing businesses to make the most of their funding. 

Secured term loans provide businesses with a fixed repayment schedule and manageable monthly instalments, making them an ideal choice for those looking to borrow large sums of money. Interest only loans, on the other hand, require only monthly interest payments, with the principal amount repaid in one large sum at the end of the loan term. This option can be especially beneficial for businesses that require startup funding or want to maximise their working capital. 

Bridging loans can also be secured with interest rates starting at 0.91%. These facilities typically last between one and two years, and are required to be paid off when the loan payment is due in a single ‘bullet payment’. 

Our goal is to assist businesses in obtaining the financing they need while keeping costs reasonable. Our flexible and affordable lending options are designed to accommodate the unique financial needs of businesses across various sectors and stages of development. 

How much will my property finance loan cost overall? 

Determining the overall cost of your property finance depends on various factors, including the specific funding facility you choose from our loan range. We prioritise transparency and clarity in all of our financial products, ensuring you have a clear understanding of the costs involved from the very beginning. 

Regardless of which financing solution you opt for, we will agree on the full cost upfront, and you can trust that there will be no hidden extras or surprises down the line. Our commitment to fair and transparent pricing means you can confidently plan and budget for your loan repayments, making it easier to manage your business finances. 

The total amount you repay will depend on factors such as the loan amount, interest rate, term length, and any associated fees. Our friendly in-house experts are always available to guide you through the process, and will provide you with any additional information to help you make an informed decision about your property finance loan. 

We offer various financing solutions, and if you would like to discuss any of our options, we encourage you to contact us at any time on – 020 7839 1980 – alternatively you can request a call back at a time convenient to you. 

How soon could I get my property finance funding? 

At Nucleus, we understand that time is often of the essence, that’s why we strive to offer quick business loans to help you access the financing you need as soon as possible. Once your property valuation is complete, the process usually takes around two to three weeks to finalise. However, you can help expedite the process by taking a few proactive steps. 

Hiring a good solicitor: Engaging a knowledgeable and efficient solicitor can significantly streamline the loan process. They will be able to handle any legal matters related to your loan application, making sure all documentation is accurate and complete, which in turn can help speed up the approval and funding process. 

Having all your relevant documents readily available: Ensuring that you have all the necessary documents at hand can save valuable time during the application process. This may include proof of ownership for the property being used as collateral, financial statements, a detailed business plan, and cash flow forecasts. Having these documents readily available will allow our team to assess your application quickly and efficiently, ultimately getting your funds to you sooner. 

Can I settle my business property finance agreement early? 

Yes, you can repay your loan early at no additional cost, as long as you cover the full outstanding balance. This flexibility allows you to manage your finances more effectively and potentially save on interest payments if you’re in a position to pay off your loan ahead of schedule. 

Our goal is to provide tailored financial solutions that support your business throughout its growth journey, adapting to your changing requirements. By granting early settlement of your finance agreement without extra charges, we aim to give you full control over your debt, allowing you to make the best monetary decisions possible for your business. 

Do I need to be a homeowner to get UK property finance? 

To qualify for UK property finance through Nucleus, you typically need to own residential or commercial property with adequate equity to secure the loan. This ensures that there is sufficient collateral in place, enabling the more favourable loan rates and terms which secured facilities offer. 

We also understand that not all business owners may have the necessary property ownership to secure a loan. In such cases, we may consider third-party guarantors with security. A third-party guarantor is someone who agrees to provide their own property as collateral to secure the loan on behalf of the borrower. This option can be beneficial for businesses that do not own property or have insufficient equity in their property but can secure a guarantor with the necessary assets. 

What credit score is required for a secured loan? 

The credit score needed for a secured loan varies from case to case and you will find that this is typically dependent upon specific requirements between lenders. As a standard, business credit scores range from 0 to 100, with higher scores indicating lower risk. A score of 50 and above is generally considered below average risk, while 80-90 is low risk, and 90-100 is very low risk. 

Several factors determine your credit score, including payment history, credit utilisation, and the length of credit history. Responsible financial management and a strong credit history will contribute to a good score. Scores below 50 are seen as above average risk but may still meet our criteria. 

At Nucleus, we recognise that unforeseen situations can sometimes lead businesses to face challenges. Nevertheless, we evaluate each application individually, taking into account the various factors involved in securing loans. As a result, there could be circumstances where a business owner with a high-risk or lower credit score may still qualify for financing. 

What are the alternatives to Property Finance? 

While property finance can be an excellent solution for many businesses, it may not be suitable for everyone. Luckily, it’s just one of the various business lending products we offer. From cash advances to our popular Nucleus Business Loans, you can view our full range of business finance solutions. 

We can also offer you a tailored combination of multiple products. If you would like to discuss any of our options, we encourage you to contact us at any time on – 020 7839 1980 – alternatively, you can request a call back at a time convenient to you. 

Secured business loan example 

Let’s run through a generic example of what a secured business loan might look like. 

A restaurant business owner needs £250,000 to fund their expansion plans – they approach Nucleus to apply for a secured business loan using their commercial property as collateral. 

Nucleus evaluates the application, taking into account the business’s credit history, financial performance, and business plan. Our expert team works closely with the business owner to understand their situation and unique needs, and provide the best possible financing solution. 

A loan agreement’s details might look something like: 

• Loan Amount: £250,000 

• Interest Rate: 1.5%  

• Loan Term: 5 years (60 months) 

• Repayment Structure: Monthly instalments (principal and interest payments) 

• Collateral: Commercial property 

The loan-to-value (LTV) ratio is 65%, meaning the loan amount is 65% of the property’s value that the business owner puts forward as collateral. With Nucleus’s support and the secured business loan, the business owner can confidently proceed with their expansion plans, knowing they have a reliable financial partner to help them achieve success. 

 

What is Property Finance and how does it work? 

Property Finance is a secured business loan available to companies operating in England and Wales. It works by the borrower securing their residential or commercial property against the loan value they seek. Depending on the value of the property, borrowers can gain anywhere between £25k and £2m. 

The process of securing Property Finance with Nucleus is simple. Once you have made your initial inquiry, one of our expert financial advisors will contact you and discuss your business plan. If you are accepted for the facility, we request any relevant legal paperwork from you, then a valuation of your nominated property is taken to discern the loan to value ratio. 

When the valuation is complete and we have processed all the relevant paperwork, we can finalise the loan. This will include important things like repayment terms, interest rates, any processing fees. When everything is agreed upon and both parties are happy with the arrangement, funds will be hastily transferred! 

While your plans for the loan will be discussed at length with our financial team prior to being funded, to get a working idea of what the majority of our clients use our Property Finance product for, it is worth exploring why this facility is so popular amongst such a diverse range of businesses. 

Working Capital:

One of the most common uses of Property Finance is to access working capital. With the added boost businesses can easily cover operating costs like rent and payroll, as well as ensuring their inventory and the company utilities are sound. During periods of lowered business, a facility to bridge the gap can be vital before the next drive for growth. 

Growth Funding: 

Speaking of growth – whether it is purchasing new equipment, expanding the workforce, or expanding location count – well timed access to our Property Finance package can provide any growing company with the necessary funds to secure their expansion without putting a strain on their operating funds. 

Debt Consolidation: 

While it is never an ideal situation to be in, sometimes businesses come across hard times whether it be a change in the market or unexpected circumstances, regardless of your position, our Nucleus financial team will hear out any finance query, and if it is possible be more than happy to provide finance for debt consolidation. Through this, repayment plans can be simplified with the target of reducing the overall cost of borrowing. 

Start-ups: 

Another popular reason for our clients to seek a secure business loan is for their new business ventures! They might be low on fixed assets or do not meet certain standards for traditional lending criteria due to the age of their business or lack of financial data. By opting to leverage their property to secure a well valued facility, they can get the funds they need to pursue their dreams. 

What is a fully amortised loan? 

A fully amortised loan is a loan type where the borrower regularly pays off both the principal, or original amount of funds borrowed, and the agreed upon interest rate of the loan. Throughout the loan period, and by the agreed upon repayment date, both the principal and the interest will be paid off. As more of your loan is paid back, you will pay less loan interest, while your loan principal repayments can typically be negotiated throughout the life of the loan. A fully amortised loan is a common loan repayment structure for most loans with a principal and interest to payback. 

Loan Principal: 

The principal of a loan is simply the amount of money you seek to borrow from a lender like Nucleus Commercial Finance, minus any interest on the loan. This is also the amount from which your interest is calculated. If you seek a loan amount of £5,000, this will be your principal. 

Loan Interest: 

The loan interest rate is the amount a lender charges you for the loan. It will consist of a percentage, and is based on the loan principal. A 1% interest rate on a £5,000 loan means the total to repay in a fully amortised loan will be £5,050, spread out over the regular payments of your product agreement. 

If no payments are missed, throughout the cycle of a complete fully amortised loan agreement, both your principal and any interest on the loan will be paid in full by the time of your repayment date. 

How long will my deal take to pay-out? 

Usually around two to three weeks. Once a financial analysis of your business and valuation of your nominated property is complete, and an offer is given, the process is quick. The entire proceeding will also be made simpler if you have an efficient solicitor, and do your best to make any necessary documents available from the start of your inquiry. 

First we request the last twelve months of your business bank statements via Open Banking access. With our innovative fintech tools, we are able to gather a comprehensive picture of your financial data. We will also require recent records of your business accounts, along with a cash flow forecast, and if you are just beginning your venture through a start-up, we request a business plan along with your query. 

Our team of financial experts at Nucleus will be in frequent contact with you and your business / partners, and from the start of the process to its completion, we will try our best to be by your side through the entire process. Our goal is to build lasting partnerships with familiar faces, and aim to empower as many growing enterprises as we can. For more information, you can reach out to our team on – 020 7839 1980 – or you can also ask us to call you back at a more convenient time. 

When is my repayment date? 

Your repayment date will be sent to you at the start of your facility agreement, and will vary depending on the type of Property Finance you use – whether it is a term loan or interest only. If at any time you are unsure of anything, including your repayment date or your outstanding balance, please don’t hesitate to contact one of our team on 020 7839 1908. 

Term Loans: 

Nucleus term loans are fully amortised facilities, offering businesses up to 7 years to repay the funds. Through this product, prospective business owners can borrow anywhere up to £2 million. Turnaround times are fast, as repayments will be arranged prior to completion for your company to make repayments in manageable, monthly instalments. 

Interest-Only Loans: 

Nucleus interest-only loans are repayable over upwards of 5 years in monthly instalments. Unlike our regular term loans, only the interest of the loan principal will be repaid for the duration of the facility term. At the end, the entirety of the principal will need to be repaid. 

While interest-only loans may seem particularly appealing in the short term, due to the smaller repayment instalments across the duration of the product, it should be emphasised that a business should have a well devised exit-plan to ensure they do not run into trouble as the final repayment date approaches. This is something that can be discuss with our financial advisors. 

How long do I need to be trading to access Property Finance? 

With Property Finance, we consider businesses of all maturities, including start-ups. While this is the case, there are numerous things that can help your business secure superior loan conditions, as well as help us advise you on what the best facility could currently be for your unique circumstances. 

Naturally, an older business with a more established trading history can prove useful for both demonstrating financial health and longevity. It also makes it likelier that a responsible company can put forward a positive credit rating, demonstrating their trustability. The faster a prospective business can produce its financial records to us and pass any eligibility checks, the sooner it can gain access to the funds it seeks. 

That being said, we do not discriminate against any business solely based on its trading history. We invite aspiring start-ups to consider our different types of funding, with our secure property finance in particular being available to prospective borrowers who can present a solid business plan, as well as demonstrate promising cash flow forecasts. Together, without our expert financial team, we can discuss your plans and potential market opportunities. 

Once our expert financial team has worked with you to establish your trading history and business plan, a decision can be made quickly through access to Open Banking. If all is successful, funds can be in your bank account within 24 hours. 

What is a 1st and 2nd charge? 

First and second loan charges refer to the amount of value of a particular property or asset that a business will offer to secure a facility. The first charge might offer 60% of a property up as collateral to secure a loan, and then later down the line, offer another 20% of the same property to secure a second loan from a second lender. 

1st Charge: 

The first charge is typically going to be the larger percentage of the loan to value (LTV) ratio secured against the property or asset, with Nucleus offering as much as 70% for residential, and 60% commercial. If a business owns a commercial property worth £200,000, and they are seeking the maximum LTV, that company could secure £120,000 using the property as collateral. This would reliably leave £80,000 worth of value in the property for a potential 2nd charge.  

2nd Charge: 

The second charge is just as it sounds. It becomes the second time a property or any asset is used to secure a second loan. This will typically be much smaller than the first charge, and many considerations will need to be taken into account, including outstanding mortgages, and what value is left in the property after the first charge amount has been offered up as collateral. 

If, for unforeseen circumstances or any other problems a business must default on their loan, and the property they have used as collateral is then sold, it is lender of the 1st charge who is entitled to reclaiming their loan amount first, while the lender of the 2nd charge can then attempt to claim any left over funds. 

When using property to secure a loan, it is important to consider the LTV, and how much you wish to use of your asset as collateral, and it is something our financial advisors will always help you to decide when you make your application. 

How to get a secured business loan with Nucleus

We’re one of the UK’s leading secured business loan providers, offering flexible and fast secured business loans online to start-ups and SMEs from a full spectrum of industries. We have a focus on creating long-term relationships with our clients that are based on a true understanding of their business, which is why our secured loan application process follows an in depth, face-to-face, and onsite appraisal.

To find out more about our secured business loans, take a look at the different types of funding we provide for our clients, or get in touch with us to talk about next steps.