Short answer
Secured Business Loans: what matters first
A secured business loan is backed by an asset such as property, equipment, vehicles or a general security interest over business assets, which the lender can rely on if the loan isn't repaid. Because the lender carries less risk, secured loans usually offer lower rates, larger amounts and longer terms than unsecured loans. The trade-off is time and complexity: valuations, title checks and security documents add steps, so settlement usually takes longer. Security doesn't replace trading: lenders still need to see the business can make the repayments from recent bank statements and revenue. If the security is the family home, the risk to that property is real, so get independent advice before signing.
Who it is for
Secured loans suit businesses with acceptable assets and a need where a lower rate or longer term outweighs speed.
- Businesses or directors with property equity they are prepared to offer
- Owners funding a larger amount than unsecured lending allows
- Businesses wanting longer terms to keep repayments lower
- Operators refinancing more expensive unsecured debt
Common funding uses
Secured lending tends to fit larger, longer-lived purposes.
- Expansion, a new site or a major fit-out
- Buying a business or a partner's share
- Consolidating several short-term facilities
- Larger stock or contract commitments
What affects eligibility
Lenders assess both the security and whether the business can service the loan.
- Value, type and location of the security, and any existing mortgages
- Monthly revenue, profitability and trading history
- Existing debt, ATO position and bank conduct
- Credit history of the business and directors
- Loan amount compared with the security value
What documents are needed
Expect more documents than an unsecured loan, mainly about the security.
- Recent business bank statements, usually the last 3 to 6 months
- ABN, entity and director details
- Requested amount and a clear funding purpose
- Basic turnover, trading history and contact details
- Details of the property or assets offered and any existing loans against them
- Recent financial statements or tax returns for larger requests
Frequently asked questions
What can be used as security for a business loan?
Commonly residential or commercial property, vehicles and equipment, or a general security interest over business assets registered on the Personal Property Securities Register (PPSR). Each lender decides what it will accept.
Is a secured loan always cheaper than unsecured?
Usually, but not always in total. Valuation, legal and establishment fees and a longer term can add to the total cost. Compare the total repayable, fees and term for each option.
Is a secured business loan slower?
Generally, yes. Valuations, title searches and security documents add days or weeks. If speed matters more than rate, an unsecured loan may be the better fit for a smaller amount.
Does Blackcube Capital lend the money?
No. Blackcube Capital is a commercial credit facilitator, not a lender. Funding is provided by third-party lenders, subject to their assessment, approval and terms.
Sources and further reading
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