In 2025, many business owners are looking beyond traditional unsecured loans and turning to a powerful alternative: securing business loans against property. Whether it’s your home, a buy-to-let, or commercial asset, using property as collateral can unlock higher borrowing limits, longer terms, and significantly lower interest rates.

This approach isn't just for large firms—sole traders, company directors, and small business owners are increasingly using secured loans to fund growth, manage cash flow, or refinance expensive debts.

What Is a Business Loan Secured on Property?

It’s a type of commercial or semi-commercial borrowing where the lender takes a legal charge over your property as security. You remain the owner, but if you default, the lender has the right to recover the debt through the asset.

The property used can include:

• Your main residence (with consent and careful structuring)
• A buy-to-let or holiday let
• A commercial unit or office
• A property portfolio
• Land with or without planning

Why Use a Property-Backed Loan in 2025?

✅ Access to Larger Sums
Secured loans often allow you to borrow £100,000–£5M+, depending on equity.

✅ Better Rates
Interest is typically much lower than unsecured lending or merchant finance.

✅ Flexible Use of Funds
You can fund business growth, refinance other debts, invest in assets, or manage cash flow.

✅ Longer Terms
Terms from 2 to 30 years offer repayment flexibility, with both interest-only and capital repayment options.

✅ Credit Challenges Can Be Managed
Because the loan is secured, lenders may be more flexible on credit profile, trading history, or sector risk.

Use Cases We See at Willow

We regularly help clients secure property-backed loans for:

• Expanding operations or opening new locations
• Purchasing stock or equipment
• Refinancing expensive business credit cards or merchant cash advances
• Supporting a turnaround strategy after a tough year
• Funding acquisition of a competitor or strategic asset
• Bridging a short-term cashflow gap

Key Considerations Before Proceeding

❌ Risk of Repossession
Defaulting on repayments puts your property at risk. This is not a light decision.

❌ Valuation and Legal Costs
Expect upfront costs for valuations, legals, and arrangement fees.

❌ Lender Scrutiny
Even though it's property-backed, lenders will still look at your business viability and repayment ability.

❌ Second Charges Can Be Complex
If the property already has a mortgage, you may need the first lender’s consent to place a second charge.

Lending Criteria in 2025: What Lenders Want

• Loan-to-Value (LTV): Usually capped at 70–75% of property value
• Property Type: Must be acceptable security—some lenders exclude non-standard construction or unlettable land
• Business Type: Must be trading or have a viable plan (startups may need projections)
• Repayment Strategy: Interest-only accepted if there’s a clear exit (e.g. sale, refinance, income growth)

Residential vs. Commercial Security: What’s Better?

Residential Property
Pros: Lower interest rates, broader choice of lenders
Cons: Requires consent from all owners; may trigger regulatory oversight

Investment Property
Pros: Keeps your home separate; more structuring flexibility
Cons: Typically higher interest rates; lower maximum LTVs



Commercial Property
Pros: Asset and tenancy can strengthen the case for lending
Cons: Smaller pool of willing lenders; higher valuation and legal costs

Final Word

Securing business finance against property is a powerful strategy in 2025—when structured correctly. It can unlock capital, reduce costs, and open up growth opportunities, especially for directors and owners who are asset-rich but cash-constrained.

At Willow, we specialise in structuring bespoke property-backed business loans that align with your goals, risk profile, and long-term strategy.

📞 Want Help Navigating Today’s Market?

Book a free strategy call with one of our finance specialists.

We’ll help you find the smartest way forward—whatever your business needs.