Secured Business Loan Rates Explained

Secured business loan rates are lower than unsecured rates for a clear reason. The lender holds an asset they can sell if you default. That security reduces their risk, and they pass some of that saving to the borrower in the form of a lower rate. Understanding what drives the rate you are offered, and how it sits relative to other forms of business lending, helps you negotiate from a stronger position and make better comparisons between offers.

What secured business loan rates look like in 2026

Secured business loans in the UK currently sit at approximately 6% to 10% APR for most borrowers, based on the Bank of England base rate of 3.75% plus a lender margin that varies with the deal. Stronger applications, typically those with low LTVs, prime property as security, and clean financials, sit toward the lower end. Businesses with more complex credit profiles or less marketable security sit higher.

These rates sit below the typical range for unsecured business lending (8% to 25% APR) and broadly in line with the higher end of commercial mortgage rates (5.5% to 9.5% APR). For an introduction to what secured lending is and why the rate structure differs from unsecured, see what is a secured business loan.

What drives your rate

LTV is the single most important variable. The lower the loan relative to the value of your security, the less risk the lender carries, and the lower the rate they offer. A 50% LTV application will almost always attract a meaningfully better rate than a 70% LTV application against the same property. If you can increase your deposit or offer additional security to reduce the LTV, the rate saving is often worth the effort.

Asset type affects pricing. Property is the most secure and best-understood asset class for lenders, and it attracts the most competitive rates. Equipment and vehicles are harder to value consistently and more difficult to sell quickly, so lenders build in a higher margin to reflect that uncertainty. For a full breakdown of how different assets work as security, see what can you use as security for a business loan.

Business financials matter alongside the security. A business with strong turnover, consistent profitability, and clean accounts demonstrates that repayment will come from trading income rather than enforcement. That confidence is reflected in a lower rate. Thin margins, recent losses, or a short trading history all push the rate upward.

Credit history affects pricing at the margin. Clean credit attracts better terms. Adverse credit, while not an automatic disqualifier in secured lending because the asset compensates for some of the credit risk, pushes rates upward. For more on how bad credit affects secured applications specifically, see secured business loans for bad credit.

Loan size and term also play a role. Larger loans often attract finer pricing because the lender income is proportionally greater. Longer terms sometimes carry slightly higher rates because the lender carries market and credit risk for an extended period.

Fixed vs variable rates

Fixed-rate secured business loans lock your interest rate for the term of the loan, giving certainty on monthly repayments regardless of what happens to the Bank of England base rate. Fixed rates tend to sit slightly above variable rates at the point of borrowing, but they remove the risk of rising costs during the term.

Variable-rate secured loans track the base rate or the lender's standard variable rate. Your payment falls if rates come down and rises if they go up. Variable is appropriate for businesses that expect rates to fall, or for shorter terms where the exposure to rate movements is limited.

How secured rates compare to other business lending

Secured business loans sit in the middle of the business lending rate spectrum. They are more expensive than commercial mortgages at their best rates, but cheaper than most unsecured lending and substantially cheaper than bridging finance.

Commercial mortgages, where the security is specifically real estate and the term is long, currently range from 5.5% to 9.5% APR. The lower end is accessible to well-secured property borrowers with clean financials. Where you are borrowing specifically to purchase a commercial property, a commercial mortgage will generally price lower than a secured loan against the same asset, because the lender has a long income stream and the purpose is better matched to the product. For more on commercial mortgage pricing, see commercial mortgage rates explained.

Bridging loans, the short-term property-backed option, run at 0.65% to 0.95% per month for most standard deals. At those rates the annual simple interest equivalent is 8% to 12%, before fees that push the effective cost considerably higher. Bridging is the most expensive form of property-secured lending, justified only by the speed it provides. For the full cost picture, see bridging loan rates and costs explained.

Unsecured business lending runs at 8% to 25% APR, with the lower end accessible only to well-established businesses with strong credit. For a direct comparison of how secured and unsecured lending differ across rates, amounts, and speed, see secured vs unsecured business loans.