Second charge loans allow someone to use equity in a property as security for another loan, despite having an existing mortgage. The commercial loans can be used for almost any purpose, and can be secured by both property and land.

They are sometimes referred to as second charge mortgages.

Second Charge Mortgage Guide by Business Expert

What Can You Use Commercial Second Charge Loans For?

Second charge loans are generally used for development, building or construction purposes in some of the following areas:

  • Purchasing property for investment purposes
  • Partially developed property
  • Industrial, manufacturing or office units for lease
  • Land Projects with restricted planning

Outside of property development, companies take second charge loans in order to:

  • Raise working capital
  • Facilitate expansion plans
  • Purchase key manufacturing equipment
  • Complete major repairs to existing property

How Can I Get a Second Charge Loan?

(1) Make Contact with us via the simple contact form or email 

(2) We’ll schedule a call, and then send you our simple application form

(3) Each application is reviewed by underwriters who establish the level of risk and undertake a credit check

(4) Once the underwriter has given the green light, a valuation of your property is arranged

(5) Once the legal documentation has been agreed, an official report by solicitors on the status of the property known as the Report in Title is sent to you

(6) Underwriters complete their full review

(7) Once the second charge loan is agreed, the provider will transfer you the funds.

When is a Second Charge Loan Preferable to Remortgaging?

The most common situation would be when a business’s credit score has dropped sufficiently that the second charge loan becomes a cheaper option than remortgaging.

A second reason is if the existing mortgage comes with a particularly high early payment fee, which would make remortgaging prohibitively expensive.

How Long Do Commercial Second Charge Loans Take to Arrange?

From the moment your application is submitted, the loan takes approximately one month to arrange.

Can I Get an Interest Only Second Charge Mortgage?

Both repayment and interest only second charge loans are available, depending on the finance provider and your level of credit.

What the Advantages of a Second Charge Loan?

  • Fast to arrange, offering access to capital in less than 4 weeks
  • Available to companies with a poor credit rating
  • Can help avoid having to face an early repayment charge on an existing mortgage
  • Useful for increasing working capital for a business 
  • A good solution for debt consolidation
  • Can be used for HMRC tax bills
  • Can fund property development or investment




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