What Is a Secured Business Loan and Is It Right for Your Business?

Cash flow is the lifeblood of any business, but accessing funding isn't always easy. In fact, over 45% of Australian SMEs reported difficulty securing traditional finance in the past year. If you're struggling to secure capital, a secured business loan might be the key to unlocking real growth without breaking your cash flow. Whether you’re purchasing equipment, expanding locations, or smoothing out cash flow, secured loans offer higher limits, better rates, and more flexibility, especially from non-bank lenders like Innovate Funding.

So, what exactly is a secured business loan? Let’s answer the top questions Australians are searching, backed by real insights, clear benefits, and actionable advice.

What Is a Secured Business Loan?

A secured business loan is a type of commercial finance where you offer up an asset (like property) as collateral. This gives the lender a form of security. If you default, they can sell the asset to recover their money.

Because this reduces their risk, you’ll often benefit from:

• Lower interest rates

• Larger loan amounts

• Longer repayment terms

• Easier approvals (even for startups or low-doc borrowers)

What Can I Use as Security for a Business Loan?

In Australia, you can secure a business loan using many types of assets. Lenders vary, but here are common forms of acceptable collateral:

Asset Type	Common Loan-to-Value Ratio (LVR)	Notes
Residential property	Up to 75-80%	Equity required; can be owner-occupied or investment
Commercial property	Up to 50-70%	Offices, warehouses, retail etc.
Vehicles and machinery	50–70%	Must be unencumbered or with equity
Business equipment	50–60%	Includes fit-outs, IT hardware, tools
Unpaid invoices (invoice finance)	Up to 90%	For businesses with B2B receivables

You don’t need to own your property outright. You just need enough equity in it.

How Is a Secured Loan Different From an Unsecured Loan?

Here’s a quick comparison:

Feature	Secured Business Loan	Unsecured Business Loan
Requires Collateral	Yes	No
Loan Amount	Higher (up to $5M+)	Lower (typically under $250K)
Interest Rate	Lower (from 7–10% p.a.)	Higher (from 12–25% p.a.)
Approval Speed	Slightly longer (1–3 days)	Fast (same-day possible)
Risk to Borrower	Risk of asset loss if default	No asset at risk

When Should I Use a Secured Business Loan?

Consider a secured business loan if your business needs:

• New equipment or vehicles

• Expansion funding such as new premises or additional staff

• Help managing seasonal cash flow

• To refinance higher-interest loans

• To leverage property equity for growth

It’s especially useful if you’re asset-rich but cash-poor, a common scenario for many Australian SMEs.

How Much Can I Borrow With a Secured Business Loan?

The borrowing power depends on two key factors:

1. Value of your asset (security)

2. Your business’s ability to repay

Here’s a quick guide:

• Residential Property: Up to 80% of equity

• Commercial Property: Up to 70%

• Vehicles or Equipment: Up to 70% of current market value

• Unpaid Invoices: Up to 90% of invoice value

At Innovate Funding, we help Australian businesses access loans from $20,000 to over $5 million, depending on your circumstances and asset type.

How Long Does Approval Take?

With traditional banks, the process can take weeks.

With non-bank lenders and the right broker, you can expect:

• Indicative approval in 2 to 24 hours

• Funding within 2 to 5 business days once documentation is submitted

Using a broker like Innovate Funding speeds up the process. We know which lenders move quickly and which ones don’t.

What Documents Do I Need for a Secured Business Loan with Innovate Funding?

• Identification such as driver’s licence and ABN

• Recent business bank statements (3 to 6 months)

• Asset details or title (property, vehicles, etc.)

• BAS or tax returns (optional for low-doc loans)

• A short summary explaining the loan purpose

Low-doc options are available for asset-backed loans, especially through private and non-bank lenders. No-doc options are also available where you only require identifications, council rates notice and statements (if there is an existing mortgage)

Real-World Example: How a Tradie Unlocked Growth with a Secured Loan

Client: Mid-sized plumbing company in NSW

Problem: Needed $150,000 to buy two new work utes and hire apprentices

Solution: Used equity in a residential property as security

Outcome: Approved in 48 hours. Funds settled in 4 days. Paid off early in 18 months, saving $6,200 in interest.

No disruption to cash flow. Grew team capacity. Now bidding on larger government contracts.

Frequently Asked Questions About Secured Business Loans

Can I get a secured business loan without property?

Yes. You can use vehicles, equipment, or even unpaid invoices as collateral.

What happens if I default?

The lender may repossess the secured asset. That’s why it's important to borrow responsibly and plan repayments.

Is it easier to qualify for a secured loan?

Yes. Because you’re offering security, lenders are more flexible, especially with credit history or short trading times.

Can startups get secured loans?

Yes. If you have a strong asset such as property, lenders may approve loans even with limited business history.

Are secured loans only available through banks?

No. Non-bank lenders and private funders often offer faster and more flexible secured lending.

Why Choose Innovate Funding for Secured Business Loans?

At Innovate Funding, we specialise in non-bank and private lending for Australian businesses that need fast, flexible finance without the red tape.

Here’s how we help:

• Fast approvals in as little as 24 hours

• Tailored advice based on your business goals

• Access to 40+ private lenders and commercial funders

• No upfront fees. We only get paid if you get funded

Whether you're a sole trader, SME, or established business, we make secured lending simple.

Final Thoughts: Is a Secured Business Loan Right for You

If you’re sitting on valuable assets, why let them sit idle? Turn your property, vehicles, or equipment into working capital that helps your business grow.

With better rates, higher borrowing power, and smarter structuring, secured business loans can unlock the funding your business needs without crippling cash flow.

Want expert help? Talk to Innovate Funding and find out how much you can borrow, fast, flexible, and tailored to you.