Secured vs. Unsecured Business Loans

Both secured and unsecured loans can be used flexibly to support your business goals, but they differ in how the borrowing is backed and the terms offered.

Secured Business Loans

A secured loan is backed by company assets, such as property, equipment, stock, or intellectual property, which are offered as collateral in the event of missed repayments.

Because this reduces risk for the lender, secured loans often come with larger borrowing limits, longer terms, and lower interest rates. They’re ideal for businesses seeking substantial funding or planning major investments.

Unsecured Business Loans

Unsecured loans don’t require any collateral. Approval is based on your company’s creditworthiness, financial history, and repayment capacity.

While this option offers a faster, simpler route to funding, borrowing limits may be lower, and interest rates tend to be higher due to increased lender risk. Unsecured loans are often best suited for shorter-term needs or smaller funding requirements.