Secured business line of credit: what lenders take as security and what it costs

A secured business line of credit is a borrowing limit your limited company can draw from and repay, backed by assets such as property, unpaid invoices, or stock. Because the lender has something to fall back on, limits are usually higher and rates lower, but setting one up takes longer and you'll often still sign a personal guarantee.

Security often starts above a set size. Barclays, for example, offers business overdrafts unsecured up to £50,000 and asks for security above that (Barclays business overdrafts, checked on 12 October 2026).

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What is a secured business line of credit?

A secured business line of credit is an agreed limit your company can draw from, repay, and draw again, backed by business assets the lender can claim if the company doesn't repay. You pay interest on what you've drawn, not on the full limit.

The security is what sets it apart. With an unsecured business line of credit, the lender decides your limit mainly on how the business is trading and its credit history. With a secured line, the value of what you pledge also shapes the limit and the price.

It also differs from a secured business loan. A secured loan pays out one lump sum that you repay on a schedule. A secured line lets you borrow in stages, as costs come up, and only pay for what you use.

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Secured lines come in four main forms

Most secured lines for small companies are a secured overdraft, an asset-based facility against invoices and stock, a facility secured on property, or a line backed by a cash deposit. Which one you're offered depends on what your company owns and how much it needs.

• Secured overdraft: a bank overdraft on your business current account, with security taken once the limit passes a certain size. HSBC says security 'may be required – each case is considered on its individual merits'.
• Asset-based lending: a facility against your company's invoices, stock, equipment, or property, where the available amount moves with the value of those assets. Aldermore's asset-based lending works alongside an invoice finance facility.
• Property-backed facility: a limit secured on commercial property the company owns. These usually suit larger limits and take the longest to set up, because the property needs valuing and legal work.
• Cash-secured line: a limit backed by money you hold on deposit with the lender. It's simple to arrange, but it ties up cash you could otherwise use.

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Lenders lend less than your assets are worth

Lenders rarely lend the full value of an asset. They look at what it's worth, how easily it could be sold, and how risky it is, so £100,000 of assets doesn't mean a £100,000 limit.

money.co.uk's guide to secured business loans puts it plainly: lenders 'will not usually lend you 100% of an asset's value'. How far below full value they go depends on the asset:

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How the lender takes security

The lender takes a charge over the asset, and the charge is registered on your company's public record at Companies House. Many lenders take a debenture, which covers some or all of the company's assets rather than one item.

GOV.UK describes a charge as 'the security a company gives for a loan'. It also warns that if a charge is not registered within 21 days, it may be difficult to recover the debt if the company becomes insolvent (Register a charge (mortgage) for a limited company on GOV.UK, checked on 12 October 2026). Anyone checking your company, other lenders included, can see the charge.

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You'll often still sign a personal guarantee

Many lenders ask a director for a personal guarantee on top of the security. The security covers the company's assets, and the guarantee makes a director personally liable if the assets don't cover what's owed.

Two UK lenders say so on their own sites (both checked on 12 October 2026):

• OakNorth says 'Most lenders, including us, will ask you to provide a personal guarantor when you take out a revolving line of credit' (OakNorth revolving credit facilities).
• For limited companies, Barclays says any lending up to £100,000 needs a personal guarantee (Barclays business overdrafts).

Before you sign, read exactly what the personal guarantee covers: the amount, whether it's limited, and whether it's secured on your own assets.

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What a secured line of credit costs

You pay interest on the amount you've drawn, plus fees for setting up and renewing the facility, and often for valuing the asset and registering the charge. Secured lines usually cost less in interest than unsecured ones, because the lender can fall back on the asset.

The costs to ask every lender about:

• Interest: charged on the drawn balance only, and often variable, so it can move with the Bank of England's Bank Rate.
• Arrangement fee: charged when the facility is agreed.
• Renewal fee: HSBC, for example, normally reviews its overdrafts every year and charges a renewal fee if it renews one.
• Security fees: HSBC charges an administration fee when it takes security.
• Valuation and legal fees: for valuing property or equipment and registering the lender's charge.
• Non-utilisation fee: some lenders charge on the part of the limit you haven't drawn.

Ask for the total cost of borrowing a realistic amount for a realistic time, not just the headline rate. You can compare lenders' rates and fees for lines of credit in our guide.

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Risks to weigh before you put up security

The main risk is that the lender can sell the asset if the company can't repay, and a director who signed a guarantee can be asked to pay too. Lenders can also review the facility every year and change or withdraw it.

• You could lose the asset. If the company can't repay, the lender can enforce its charge. HSBC's terms say any property or asset used as security may be at risk.
• The limit isn't permanent. Overdrafts and many secured lines are reviewed each year, and the rate or limit can change if the asset is revalued.
• Setup takes longer. Valuations, legal work, and registering the charge add time before you can draw.
• Security can limit future borrowing. A debenture over all your assets can make it harder to borrow from another lender.

If repayments start to slip, talk to your lender before a payment is missed, and check what your guarantee commits you to.

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Where UK companies get secured lines of credit

Banks and specialist lenders both offer secured facilities. Here's what four UK lenders' own websites said on 12 October 2026, chosen because each publishes how it uses security or guarantees. This isn't a ranking, and terms change, so check each lender's page before you apply.

• HSBC: you can apply online for a business overdraft of up to £100,000. Security may be required, and an administration fee applies if it is. There's an arrangement fee and an annual renewal fee (HSBC business overdraft).
• Barclays: business overdrafts are unsecured up to £50,000, and Barclays asks for security above that. Limited company lending up to £100,000 needs a personal guarantee (Barclays business overdrafts).
• Aldermore: asset-based lending against debtors, plant and machinery, inventory, and property, used alongside an invoice finance facility (Aldermore asset-based lending).
• OakNorth: revolving credit facilities tailored to the business, usually with a personal guarantor (OakNorth revolving credit facilities).

None of these lenders published a rate for a secured line on these pages. You'll get a price once the lender has assessed your company and the security.

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Secured or unsecured: which suits your company

A secured line usually suits a company that has assets to pledge, needs a large limit, and has time for the paperwork. An unsecured line usually suits a company that needs money sooner or doesn't want an asset at risk, and accepts a higher price for that.

A secured facility is often the better choice when you need a large limit for a long time and you're comfortable pledging an asset, because the lower price adds up. An unsecured line can be worth the higher price when speed matters, when you'd rather not put property at risk, or when the need is short. In both cases, expect a director to give a personal guarantee.

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How iwoca's Flexi-Loan compares

iwoca's Flexi-Loan isn't a secured line. It's a business loan with flexible repayment options: you draw what you need and pay interest on what you owe. We don't take property as security at the start, and every new Flexi-Loan needs a personal guarantee from at least one director.

Here's how the iwoca Flexi-Loan works:

• Borrow £1,000 to £1m, on terms up to five years.
• Draw what you need. You don't have to take your full approved amount, and interest is charged only on what you owe.
• Repay early with no fee. If money comes in sooner, pay us back and the interest stops.
• A director's personal guarantee. Every new Flexi-Loan needs one from at least one director, but not every director has to sign.
• A quick answer. You'll get a decision within 24 hours, but it might be longer depending on the complexity of the request.

Chris Billingham's ecommerce business, Muscle Squad, ties up a lot of cash in stock and borrows in rhythm with its sales cycle. In Muscle Squad's story, he says: 'We go through waves of borrowing a significant amount and paying back a significant amount. You need the conviction that a good period is only around the corner.'

A Flexi-Loan isn't the right fit for every company. If you have property or other assets to pledge and need a large limit over several years, a secured facility from a bank or specialist lender will usually cost less.

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How to get a secured business line of credit

Work out what you need and what you can pledge, check your credit position, then compare lenders on the full cost and the security they want. Most of the time goes on valuing the asset and agreeing the paperwork.

1. Work out the limit you need. Look at your cash flow forecast for the next year and find the biggest gap you'd need to cover.
2. List what you could pledge. Note each asset's value, any existing charges on it, and whether you'd be comfortable risking it.
3. Check your credit position. iwoca Credit Compass is free and shows your Equifax business credit score, plus four more scores, what's affecting them, and suggestions on what to focus on.
4. Gather your documents. Lenders usually ask for accounts, recent bank statements, and details of the assets.
5. Compare offers. Look at the total cost, the security and guarantee each lender wants, and how often it reviews the limit.
6. Get the security registered. Once you accept, the lender registers its charge at Companies House and you can start drawing.

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Secured business line of credit FAQs

These are the follow-up questions directors ask about secured lines, with short answers.

Is a secured business credit card the same thing?

No. A secured business credit card is a card whose limit is backed by a cash deposit you pay to the card provider. It works like any card, while a secured line of credit is a borrowing facility backed by business assets.

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Can a new company get a secured line of credit?

Sometimes, because security reduces the lender's risk when there's little trading history. Expect the lender to look closely at the asset and the directors, and to ask for a personal guarantee.

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How long does it take to set up?

Longer than an unsecured line. A secured overdraft from your own bank can be fairly quick, while a facility secured on property needs a valuation and legal work before you can draw.

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Is a cash-secured line of credit a good option?

It can be, if you have spare cash and want a cheap, easy-to-arrange limit. The trade-off is that the deposit stays locked while the line is open, so you're borrowing against money you can't use.