Infographic: Secured Vs Unsecured Business Loans Dec 10, 2018Views: 456
There are lots of different ways to raise capital for your business, but choosing whether to go unsecured or secured with your funding option can be a difficult decision.
Read on to find out everything you need to know, about the differences between these two options.
Secured Business Loans
A secured business loan is basically a loan that is protected by an asset such as equipment, machinery or real estate.
Businesses may choose this option if they want to borrow a large amount, or want lower interest rates that is spread over a longer term.
Advantages of a secured business loan:
• Larger loan amounts
• Lower interest rates
• Pay back your loan over a longer period
Disadvantages of a secured business loan
• Loan amount will depend on the value of your asset
• Assets may be seized if you can’t make payments
Unsecured Business Loans
An unsecured business loan is a loan that is not protected by any asset.
Businesses may choose this option if they do not have collateral to secure against. However, this type of lending does cost more to the borrower as it presents more risk for the lender.
Advantages of an unsecured business loan:
• Faster to obtain
• No asset security required
Disadvantages of an unsecured business loan
• Lower loan amounts
• Higher interest rates
Essentially, what it comes down to is your business needs and the position you're in at the time of applying. Look for a loan that will not only massively help you and your business but one that you know you can afford to pay back.
Created by Capalona
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