Secured Loan
A Secured Loan is a business loan backed by an asset — such as a vehicle, truck, trailer, machine, or piece of equipment — which the lender can repossess if repayments are not made. It’s the foundation of most Australian Equipment Finance, Vehicle Finance, Low Doc Asset Finance, and Business Loan structures.
The lender typically secures their interest using a PPSR registration and supports common structures like Chattel Mortgage, Hire Purchase, and facilities with a Balloon Payment or Residual Value.
Why It Matters
Because the loan is backed by the asset, lenders can often offer:
- lower interest rates compared to an unsecured business loan
- higher approval chances (especially for Low Doc applicants)
- longer terms (typically 3–7 years)
- better structuring flexibility for tax and cash flow outcomes
Secured loans also power key industries across the Tradie Hub, Truckie Hub, Whitecoat Hub, and Café Hub — from utes and vans to excavators, medical devices, and commercial kitchen equipment.
How It Works
- You apply through a lender or broker like Switchboard.
- The lender assesses the asset, your business history, and your overall credit profile.
- A PPSR security registration is lodged against the asset.
- Repayments are made monthly at a Fixed Rate or Variable Rate.
- At loan payout, security is released and the PPSR registration is removed.
Secured loans appear in structures used in Business Lines of Credit, Working Capital Loans, and short-term Invoice Finance arrangements where receivables or other assets act as collateral — forming part of a wider business cash flow system.
Common Use Cases
- Buying or upgrading a work ute, van, or light truck via Vehicle Finance or the Tradie Loan Pack.
- Financing yellow gear, trailers, and tools under Equipment Finance for growing trades businesses.
- Purchasing prime movers or rigids through the Truckie Loan Pack and the Truck Finance Checklist.
- Upgrading diagnostic devices and fitouts using the Whitecoat Growth Pack and medical fitout finance.
- Funding espresso machines, grinders, and kitchen upgrades for cafés, as covered in Top 5 Café Equipment Upgrades.
In each case, the asset itself underpins the lending decision, rather than relying purely on credit cards, overdrafts, or unsecured facilities — keeping other lines of credit free for short-term cash flow shocks.
Where Secured Loans Fit in Your Finance Strategy
A secured loan is usually the first building block in a broader funding plan for business owners. Many clients combine asset-backed facilities with Working Capital Loans or a Business Line of Credit so vehicles and equipment sit in one bucket, and short-term cash flow sits in another.
If you are comparing secured versus unsecured structures, it’s worth weighing interest rate, fees, early payout flexibility, and how each option sits with your long-term plans. You can also review general government guidance on borrowing at business.gov.au and then speak to a specialist broker.
To see how a secured loan could work in your situation, you can check eligibility online or talk to a broker who understands the realities of tradies, truckers, medical professionals, and café owners.
Quick FAQs about Secured Loans
Not always, but usually. Because the lender can take security over the asset, secured loans often come with sharper pricing than an unsecured business loan. The exact rate still depends on the asset, your credit profile, and how strong your financials are.
Yes, many lenders offer Low Doc secured loans where the asset and your ABN trading history do more of the heavy lifting. That’s common for tradies, truckers, and café owners who are growing quickly and don’t have perfect, up-to-date financials.
If repayments fall behind, the lender can add fees, report arrears, or ultimately repossess and sell the asset to recover what’s owed. That’s why matching the term and structure to your cash flow — for example, with the right cash flow support in place — is just as important as chasing a low rate.
If you’re financing a specific asset (vehicle, truck, plant, or equipment) and want to preserve credit cards and overdrafts for day-to-day expenses, a secured loan is usually the starting point. A broker can compare options across the Business Owners Finance Hub to show how secured loans sit alongside working capital and line-of-credit solutions.