Finsec review: property-secured business loans in England and Wales

Finsec is a specialist lender that provides property-secured loans to small businesses and individuals in England and Wales, with a particular willingness to look at complex income and imperfect credit. It works only through introducers, so you cannot apply to it directly. As an independent broker, Smart Funding Solutions can introduce suitable cases to Finsec and compare its terms with the rest of the secured lending market. You can read more on Finsec's own website.

01About Finsec

Finsec says it was established in 2002 and was formerly known as Northstar Loans Limited. It describes itself as an established specialist mortgage lender funded by a combination of private equity investment and high street bank funding. Its operating office is in Elstree, Hertfordshire.

The firm's niche is borrowers with non-standard or complex income and credit profiles, the cases where mainstream lenders often say no. Rather than relying heavily on accounts and turnover, Finsec leans on the property offered as security, which is why it can consider new businesses and owners whose paperwork does not fit a bank's template.

02What Finsec funds

Finsec's business lending is a form of secured business loan, backed by a charge over residential or semi-commercial property owned by the business owners.

Product	What it is for	Typical size	Typical term
Secured business loan (company or partnership borrower)	Any business purpose, including working capital and repaying debt	£5,000 to £250,000	1 to 15 years
Second charge loan (individual borrower)	Personal or business purposes, secured on the borrower's home	Up to £100,000	3 to 25 years
Buy to let secured loan	Raising money against a rental property	Up to £100,000	3 to 25 years

Security can be a first, second or third charge over owner-occupied homes, investment property or semi-commercial property in England and Wales. Finsec says total borrowing, including the existing mortgage, should not exceed 70 per cent of a residential property's value, or 65 per cent for investment or semi-commercial property. Customers who keep up repayments for at least six months can apply for a further advance.

03Who Finsec suits (and who it may not)

Finsec is built for business owners with property equity and a story that does not fit neatly into a bank's credit model. Its site says accounts are not required and there is no minimum turnover. Good fits include:

• A limited company or partnership that cannot show strong accounts but whose directors own homes with equity
• New businesses, which Finsec says it considers alongside established firms
• Owners with complex income or a patchy credit history who have been declined elsewhere
• Businesses wanting to consolidate expensive short-term debt into a longer secured loan, a theme covered in our guide to business debt consolidation loans

Finsec is not an option if:

• The property you can offer is in Scotland or Northern Ireland
• No director or partner owns property, since lending is always secured
• You need more than £250,000
• You are unwilling to put your home at risk, in which case unsecured borrowing may be more appropriate

04What Finsec looks at

Finsec's business loan FAQs set out what an introducer needs to submit:

• The loan amount and what it is for
• The preferred repayment term
• Full names, addresses and dates of birth of the borrower and guarantors
• The address and estimated value of the property offered as security

For limited companies and partnerships, directors, partners or shareholders give personal guarantees secured against property they own. A valuation of the property is normal, and the lender will check the existing mortgage balance to work out available equity. Even without accounts, expect questions about how the business will afford the repayments.

05Pros and cons

Pros

• Considers complex income and non-standard credit histories
• Accounts not required and no minimum turnover
• New businesses can be considered
• Long terms of up to 15 years for business loans keep repayments lower
• Accepts first, second or third charges, so an existing mortgage need not be disturbed

Cons

• Always secured on property, so your home is at risk if repayments are missed
• England and Wales only
• Specialist lending for complex cases usually costs more than mainstream secured borrowing
• Only available through an introducer

06Applying through a broker vs going direct

With Finsec, going direct is not possible: its site says all applications must come through an introducer. That makes the choice of broker important. A good one will check whether you could borrow more cheaply without security, or on better terms from another specialist, before putting your home on the line.

We search the market across 300+ lenders, including mainstream and specialist secured lenders, present your case once and help you compare the total cost, term and early repayment terms of each offer. Smart Funding Solutions is an independent broker and is not part of Finsec, which is one of the lenders on our panel. It is free to enquire; any broker fee is disclosed separately before you proceed. Use our instant quotes tool to compare lenders in minutes.

07Alternatives to Finsec

• Together: a large specialist secured lender, worth comparing for bigger loans or property-backed borrowing beyond Finsec's limits.
• Mercantile Trust: another secured lender on our panel that can be compared for homeowner business borrowing.
• Fleximize: offers both secured and unsecured business loans, so it can suit owners who want to see an unsecured option side by side.

If your credit history is the main obstacle, our guide to bad credit business loans explains the wider options.