Secured Business Loans up to $975,000
Looking for secured business loans? We’ve helped many companies do just that. We can approve you for up to $975,000. Secured business loans are often cheaper than unsecured loans and can hep your business thrive.
Secured business loans mark the difference between an opportunity taken and an opportunity missed. Secured business loans provide more risk than unsecured business loans. However, the benefits far outweigh those risks.
What Are Secured Business Loans?
An alternative to a standard unsecured loan is a secured business loan. The borrower puts up assets as collateral to acquire a loan.
Secured business loans are beneficial for small businesses and those with bad credit or not enough credit history to get access to loans. These loans allow businesses to purchase equipment or other assets now instead of later.
Secured vs Unsecured Business Loans
The benefit of secured business loans is that the standard to apply is typically lower than unsecured. Therefore, more people can qualify and take advantage of secured business loans.
Examples of Secured Loans
There are a lot of secure loan methods, such as mortgage loans. When someone purchases a house, they put it up as collateral to the bank. The bank owns your home and will keep it if you fail to pay.
The benefit of mortgaging a home is the ability to purchase a house immediately and make payments as you live in it. This type of loan also helps improve credit.
The alternative to a credit card is a secured credit card. Like a credit card, you get a line of credit, but the cardholder puts down a cash deposit for the creditor. That cash deposit then becomes the borrower’s credit line.
The advantage of a secure credit card is building good credit fast for those who have had a bad history of credit.
A secured line of credit works similarly to secured business loans. Most secured loans tend to take collateral to ensure the lender is in a favorable position to give to the borrower.
In this case, opening a line of credit would involve offering up some form of real estate or personal assets account to assure security to the lender.
How Do Secured Business Loans Work?
Like any loan, secured business loans act as a method to front-load cash to a business to purchase assets or pay for whatever expenses they may need with that money.
Secured business loans work so well because they depend on an asset exchange. The lender gives the borrower access to a line of credit or cash advance that they would typically not have unless they liquidate their assets.
In the case of a secured loan, the lender is lending this money with a safety net. This is because the asset they take as collateral will typically be worth the same value as the loan to recoup the rest of the loan in case the borrower defaults.
The borrower benefits from this relationship because the qualification for receiving this kind of loan isn’t as strict as an unsecured loan. The borrower also has the perk of receiving a lower interest rate and will be able to borrow more and pay less in interest.
How to Qualify for Secured Business Loans
The qualification for a secured business loan isn’t as strict as other loans. Having decent credit and assets worth value to put up for collateral will help you qualify for a secured business loan.
Where to Get a Secured Business Loan
Most banks and credit providers provide secured business loans. A common question asked when trying to secure a business loan from a bank is, “are small business loans from banks secured or unsecured.”
The answer depends on your credit and the deal between the bank. You may qualify for a secured business loan easier than an unsecured one. So, typically bank loans tend to lean more towards being secured rather than unsecured.
How to Apply for the Best Secured Funding Option
Eligibility Requirements
Having good credit isn’t necessarily a requirement to secure a secured business loan, but it certainly doesn’t hurt. The only absolute requirement is owning assets that equal the value of what you want to borrow.
Funding Limits
The limit to your funding depends on the loan provider and the collateral you offer. Most lenders will give you 60-75% of what your asset(s) is worth in cash value.
Term Length
Secured business loans come with the privilege of having extended loan periods, allowing the borrower to pay back the money over a long period if they so desire. The term length between the lender and the borrower will always vary.
Pros and Cons of Secured Business Loans
Like any loan, there are pros and cons. Understanding what a secured business loan can offer you may help you decide whether it’s the route you want to pursue.
Pros of Secured Business Loans
Ease of access: A secured business loan is easier to acquire than unsecured loans. This ease of access allows smaller businesses to receive a loan without outstanding credit or a long history of borrowing money.
Lower interest rate: A lower interest rate on a massive loan goes a long way in saving money. Businesses with exceedingly good credit opt to go for secured loans. While having bad credit still subjects you to higher interest rates, on average, the interest rate on secured business loans will always be lower than unsecured.
Extended payment periods: There is more flexibility with secured loans because of the loan provider’s added security. Since this is the case, borrowers can extend their payment period. The longer-term consequences still exist, but this option is there if payments are prompt and the time is needed.
Cons of Secured Business Loans
Collateral: The fact that one has to put up their assets is enough to scare someone off from secured business loans. Assuming you default on your loan, the lender may seize your assets. Regardless of how assured you are that you can repay the loan, you are taking a more significant risk than the lender.
Credit damage: Secured business loans, while they don’t take the best credit to acquire, will damage your credit significantly if you default on your loan. The added damage comes from losing the assets put up for collateral.
Alternative Funding Options
Merchant cash advances have similar benefits to secured business loans. Still, instead of taking collateral, they usually take an agreed-upon percentage of your future sales—a valuable option for high-revenue businesses that need additional fast funding.
Depending on what you need financing for, small business owners can also look into SBA loans through the Small Business Administration, secured business lines of credit, equipment financing, and more.
Secured Business Loans Frequently Asked Questions
It depends on what you need from a business loan. If you need to secure a loan fast, with a lower interest rate, and easy, secured business loans are your favored choice.
If you don’t want any risk of potentially losing assets, have the credit, and don’t mind paying a bit more in interest, your favored choice will be an unsecured loan.
Drawbacks for both exist, but it’s a matter of what you as a business owner value more.
Yes, secured loans are easier to get than unsecured loans. Secured loans are less of a risk to the lender, so the lender is in a favorable position to give out a loan. Unsecured loans come with more risk to the lender, making them harder to acquire.
There are secure loans for bad credit. Since collateral is the main appeal of secured business loans, the lender takes less risk of lending out money. Although, interest rates on these loans may be higher because of bad credit.
Secured and unsecured loans are installment loans unless you open a line of credit to withdraw more money continuously. Installment loans are a lump sum of cash given to someone, and the borrower will make payments regularly, with interest.
Personal loans are considered forms of unsecured debt. If you stop payments on these loans, there is no collateral for the lender to take from you.
It’s unsecured debt.
Funding Your Business Is Our Business
Secured Business Loans Can Help Your Business Thrive
The access you get from secured business loans is beneficial for those who need their business to thrive. Opportunities come and go, so it is vital to catch each one as often as possible. Secured business loans help ensure you’re ready to grab these opportunities as they arise.
Secured business loans make an excellent alternative to unsecured business loans. While you take more of the risk as a borrower, it’s a more accessible and effective way to secure funds for your business.
Secured business loans for startups continue to be the favored choice for these reasons. Even for people with bad credit, these loans help ensure they can keep up with industry demands.
Don’t Allow a Lack of Funding
to Hold your Business Back
It’s Time To Move Your Business Forward!