07/25/11

Unsecured vs Secured Business Loans

unsecured vs secured

Image via unsecuredsecuredloans.com

When your searching for the right business loan, you’ll be faced with two choices: an unsecured loan or a secured loan. What’s the difference?

An unsecured business loan is a loan made to a business without collateral. A secured small business loan is a loan made with something used as collateral for the lender to recoup their losses if the business defaults. below is a look at unsecured versus secured loans. If you want to compare business loans to see what type are secured or unsecured, see our recent infographic here.

Collateral

Terms

Approval

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Comments

  1. Whether you have an unsecured or secured loan the 5 C’s of credit is important to know. The better your odds of getting your loan if you prepare!
    1. Credit– what does your credit report and score look like?
    2. Collateral–do you have any asset i.e. your home equity, savings, etc to pledge?
    3. Conditions in the market–right now the economy is making it tough for the small business. Banks are under tighter regs so money is not flowing easily
    4. Character–sounds hokey, but if you have an address of San Quentin or other major issues with the law, drugs, outstanding liens, etc. you may have problems
    5. Capacity–does the business have the ability to pay on the loan now and in the future.
    Without the above knowledge you are NOT prepared to apply for an unsecured or secured loan. You want to get your best terms for your money so prepare accordingly!
    Denise

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