Second charge

Second-charge borrowing to fund the business

A second-charge loan sits behind your existing mortgage, releases equity for the business, and leaves your low-rate first mortgage untouched. It's often the cheapest route to sensible-sized business funding for directors.

Audience: Directors of established SMEs

Situation: You have equity in your home and the business needs capital — but re-mortgaging would sacrifice a cheap fixed rate.

Primary: Business Loans

The situation

The obvious route — remortgage and release capital — often means giving up a fixed rate that's several percentage points below current market. A second charge preserves that rate.

How we approach it

We arrange regulated second-charge loans (or unregulated where the purpose is fully business), price them against genuine business use, and structure the term to match the funding need.

What that looks like in practice

First-charge mortgage undisturbed — keep your fixed rate
Loans typically £50k-£500k depending on equity and affordability
Terms 5-25 years; interest-only available in some cases
Consent from first-charge lender required (usually granted)
Regulated advice where purpose isn't wholly business

Typical timeline

Week 1
Equity, affordability and first-charge consent assessed.
Week 2-4
Application, valuation, legals.
Week 4-6
Completion and drawdown.

Common questions

Will my first-charge lender agree?

Almost always for straightforward cases — they retain their position. Some specialist first-charge lenders decline consent; we check before you commit.

Is it cheaper than a business loan?

Usually meaningfully cheaper, because it's secured on residential property. The offset is your home is at risk — this is a serious decision.

Can I repay early?

Yes — ERC structures vary. We only recommend products where early repayment terms match your likely exit.