Secured vs unsecured UK business loans
When security helps, when it does not, and the legal mechanics of debentures, fixed and floating charges.
Director, BestBusinessLoans
Oliver leads BestBusinessLoans's editorial reviews and methodology. With a background in UK commercial finance, he oversees lender research, rate verification and review independence.
Last reviewed: 26 April 2026
What "secured" actually means
Secured means the lender has a registered legal claim over named assets or the whole asset pool. If the loan defaults, the lender can enforce the security, repossess the asset, appoint a receiver, or block its sale. Security is registered at Companies House and visible to other lenders.
Fixed vs floating charge
A fixed charge sits over a specific named asset (e.g. a property or piece of plant). The borrower cannot sell the asset without the lender's consent. A floating charge sits over a shifting asset pool (e.g. all stock, all debtors). The borrower can sell stock and collect debtors as normal until "crystallisation", usually default, when the floating charge becomes fixed.
Debenture
The umbrella loan agreement that creates the charges. Most UK SMB term loans secured against company assets are documented as a debenture with a fixed charge over key assets and a floating charge over the rest.
When to take secured
When the rate saving justifies the friction. Secured rates can be 2 to 5 percentage points lower than unsecured equivalents for the same applicant. Below £50k tickets the saving rarely justifies the legal cost. Above £150k, secured is usually worth pursuing.
Personal guarantees vs company security
A personal guarantee makes a director personally liable. A company security gives the lender a claim on company assets. They are different mechanisms; many UK SMB loans require both. Check what is being asked before you sign.
FAQ
Does secured mean no PG required?
Not usually. Most UK SMB lenders take both, a charge over company assets AND a director PG. The PG covers the gap between the asset value and the loan, plus enforcement costs.
Reviewed by Oliver Mackman, Director. Last reviewed: 2026-04-26.