Secured Business Loans
A secured business loan may make sense for some businesses in certain situations. Obviously, any loan used to purchase expensive items like business real estate, expensive equipment, and vehicles may use these items listed as security, or collateral. After all, buying a building costing several hundred thousand dollars is the realm of a secured business loan, which will enable a long term and affordable payments. There are secured business loans that are smaller in size, though. These loans still require business assets to be used as collateral, and place the business owner in a place of risk because the collateral can be seized if there is an issue with payment. An unsecured business loan may be a better choice for many small business borrowers as funding is quicker, there is no collateral risk, and underwriting is not really concerned with credit score or overall credit history.
What Are the Benefits of Secured Versus An Unsecured Loan?
Secured loans typically offer the lowest rates, but in order to qualify for a secured business loan a company needs to have substantial assets in which to secure the new loan. General business assets, vehicles, buildings, and inventory can all typically be used as collateral. This means that the business owner is putting these items at risk should a default or late payment situation occur. An unsecured business loan will normally have a higher interest rate than a secured loan, but the trade-off is that there is really no risk to the borrower in terms of forfeiting collateral in a late or non-payment situation. Unsecured loans offer a quicker and simpler application process, and funding is typically accomplished in less time. For the majority of those seeking a loan to enhance the short-term cash flow needs of their business, an unsecured loan may provide the needed help and can be put into place quickly.
AllBusinessLoans.com Offers The Loans To Suit Your Business
At AllBusinessLoans.com, our mission is to provide a safe and efficient way to connect your business with the lenders who can offer the loan product you need. Small business loans online can seem confusing, but with our quick and intuitive application, five minute is all you need to start the process of receiving the cash you need to help grow your business. Apply today!