Secured Business Loan Calculator UK
This secured business loan calculator compares the cost of borrowing with and without security. For example, £50,000 over 5 years costs £996.06 a month at 7.5% on a secured loan, against £1,085.50 a month at 11.5% unsecured, a difference of £5,366 over the term. Enter the rates and fees from your own quotes to compare them properly.
- Example secured payment£996.06/month
- Example unsecured payment£1,085.50/month
- Unsecured loansusually need a personal guarantee
Updated November 2026 · Standard loan formula, APR-based
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Secured vs unsecured business loans
| Secured loan | Unsecured loan | |
|---|---|---|
| Security | Property, vehicles, equipment or other assets | No assets; usually a personal guarantee |
| Typical cost | Lower interest rate | Higher interest rate |
| Amounts and terms | Larger sums over longer terms | Smaller sums over shorter terms |
| Speed | Slower: valuations and legal work | Often faster to arrange |
| Main risk | The lender can take the asset if you default | You may be personally liable under the guarantee |
The British Business Bank notes that unsecured loans tend to have higher interest rates because of the higher risk to the lender, and that a personal guarantee is usually required.
How business loan repayments are calculated
Most term loans are repaid in equal monthly instalments using the amortisation formula payment = L × r ÷ (1 − (1 + r)−n). For £50,000 over 60 months at 7.5%, the monthly rate is 0.605% and the payment is £996.06. An arrangement fee of 2% (£1,000) raises the true cost of the loan, which the calculator shows as the rate including fees.
Personal guarantees: what to check
- A personal guarantee makes you, as a director or owner, legally responsible for the debt if the business cannot pay.
- Check whether the guarantee covers the whole loan or a capped amount, and whether it is secured on your home.
- Take independent legal advice before signing, and ask whether personal guarantee insurance is available.
- Loans to limited companies are usually not regulated by the FCA, but loans of £25,000 or less to sole traders and small partnerships normally are. Check any lender or broker on the FCA register.
Before you apply
- Have up-to-date accounts, management figures, a cash-flow forecast and business bank statements ready.
- Compare the total cost, not just the monthly payment: include arrangement, valuation, legal and broker fees.
- Ask about early repayment charges, especially on fixed-rate secured loans.
- The government-owned British Business Bank publishes free guidance on finance options for small firms.
Frequently asked questions
What is the monthly repayment on a £50,000 business loan?
Over 5 years, it is £996.06 a month at 7.5% or £1,085.50 a month at 11.5%. Fees are extra.
Is a secured business loan cheaper?
Usually, yes. Security reduces the lender’s risk, so rates are typically lower, but you could lose the asset if the business cannot repay.
Do unsecured business loans need a personal guarantee?
Most do. The British Business Bank says a personal guarantee is usually required for unsecured business loans.
Are business loans regulated by the FCA?
Lending to limited companies is generally unregulated. Loans of £25,000 or less to sole traders and small partnerships are usually regulated consumer credit.
How do arrangement fees affect the cost?
A fee taken from the loan means you receive less money but repay the full amount. A 2% fee on a 5-year loan adds roughly 1 percentage point to the effective yearly rate.
Sources and method
We use official UK guidance and recognised formulas, and test each calculator against worked examples. Results are estimates to help you plan, not professional advice. See how we work.