What type of security would a bank look to take – and why?

The risk profile of the business and size of loan will determine the security that a bank will take.

In some early stage businesses a bank may look for additional security, which can be in the form of supported and unsupported guarantees.

Unsupported guarantees are a personal assurance to the value of £x without the charging over specific assets; supported guarantees include taking a charge over an asset.

Banks will look for security in lending to early stage fast growth businesses because, unlike venture capital, the bank does not take equity in the business.