What Types of Assets Can Be Used to Secure a Business Loan?

Last Updated on 8 July 2025

Securing funding is one of the most common challenges businesses face. Whether you’re expanding operations, purchasing equipment, or covering short-term cash flow gaps, having access to finance can be vital. But in many cases, lenders want reassurance, and that’s where using collateral to access a secured form of business lending comes into play.

By offering up business or personal assets as security, companies can reduce the lender’s risk and often access more favourable terms. This approach, commonly known as asset-backed lending, allows businesses to tap into funding solutions that may not be available through unsecured routes.

But not all assets are viewed equally. Below, we explore the most common types of assets used to support a secured loan for business purposes, and how to use them effectively.

1. Property (Commercial or Residential)

Real estate remains one of the strongest forms of security in the eyes of most lenders. This could include:

Commercial units or office space owned by the business
Buy-to-let or investment properties
Personal residential property with significant equity

The value of the property, the remaining mortgage balance, and market conditions will all influence how much you can borrow against it. Lenders may carry out independent valuations, and in some cases, will take a legal charge over the asset.

If using a personal property, make sure to fully understand the implications. Always seek legal advice before offering your home as collateral.

2. Business Equipment and Machinery

Assets such as manufacturing machinery, industrial tools, printing presses, or kitchen equipment (in the case of a catering business) can all be used as collateral, provided they are owned outright or have enough equity.

Asset finance specialists can help you leverage the value of these items without interrupting day-to-day use.

Common examples include:

CNC machines or factory tools
Commercial kitchen equipmentPrinting and packaging systems
Medical equipment (in private clinics or care businesses)

Make sure you keep clear records and purchase receipts. These help establish the equipment’s value and ownership.

3. Vehicles

Company vehicles, from vans to lorries to specialist transport, can be used as security, particularly in asset-based lending or refinancing arrangements.

Examples of vehicle types that may be accepted:

Delivery vans used in logistics
Taxis or private hire vehicles (owned, not leased)
Construction vehicles like diggers, tractors or loaders
Fleet vehicles used for sales teams or engineers

Lenders will look at the vehicle’s market value, age, mileage, and condition. A new vehicle with low mileage will typically be seen as a stronger asset than an older model nearing the end of its lifespan.

Ensure vehicles are registered to the business and not under a finance agreement, unless you’re refinancing existing debt.

4. Inventory and Stock

Stock and inventory can serve as collateral, especially if it has consistent turnover or high resale value. This option is more niche, but it can suit retail, wholesale, or import/export businesses.

Types of eligible stock might include:

Consumer goods with steady demand (e.g. electronics, clothing)
Building materials or bulk items with strong market value
Perishable goods with rapid turnover (e.g. food and drink)

Inventory lending usually involves regular audits or valuations. It may also be combined with a revolving credit facility, enabling businesses to borrow as needed based on fluctuating stock levels.

Keep your stock organised and well-documented. Lenders may want to inspect inventory or review your turnover cycle.

5. Accounts Receivable (Invoices)

Unpaid invoices are often a hidden asset, and invoice finance allows you to unlock their value. Rather than waiting 30–90 days for payment, you can access a portion of the funds upfront from a lender.

This method is particularly useful for:

Service-based businesses with recurring client contracts
B2B companies with large invoices pending payment
Businesses with seasonal fluctuations in cash flow

Options include invoice discounting (where you retain control of credit collection) or factoring (where the lender takes over collection).

Ensure your debtor ledger is clean and reliable. Lenders favour businesses with a strong credit control process in place.

6. Personal Assets

If your business lacks sufficient commercial assets, you may offer personal items as security, such as your home, savings, or valuable possessions. This is more common with smaller businesses, start-ups, or sole traders.

It’s a serious decision, as defaulting on the loan could put your personal assets at risk.

Make sure you speak to a professional finance adviser before going down this route. There may be more suitable options available based on your situation.

Why Use Assets to Secure a Business Loan?

Secured loans give lenders confidence, which often translates into benefits for the borrower:

Access to larger sums of capital
Lower interest rates compared to unsecured lending
Longer repayment terms and more flexibility
Greater chance of approval, even with a limited trading history or weaker credit score

By leveraging assets you already own, you can unlock growth funding without giving away equity or relying solely on personal credit.

Final Thoughts

Asset-backed lending is a powerful tool, but it must be used wisely. Whether you’re securing a loan against property, vehicles, stock, or invoices, the key is to ensure you fully understand the risks and structure the loan to suit your business goals.

If you’re exploring secured funding, it’s worth speaking to a broker or commercial finance expert, such as Funding Guru, who can help assess your assets and match you with the right lender.