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Compare secured business loans

Secured business loans allow you to borrow more at lower rates by using collateral.

Name Product Filter Values Loan amount APR Requirements
Biz2Credit business loans
Finder Rating: 3.75 / 5: ★★★★★
Biz2Credit business loans
$25,000 – $6,000,000
Starting at 5.99%
6+ months in business; $100,000+ monthly revenue; 500+ credit score
Get only the capital you need through secure, prescreened lenders with this highly rated company offering SBA, expansion, working capital and other loans.
OnDeck short-term loans
Finder Rating: 4.6 / 5: ★★★★★
OnDeck short-term loans
$5,000 – $250,000
As low as 35%
600+ personal credit score, 1 year in business, $100,000+ annual revenue, active business checking account
A leading online business lender offering flexible financing at competitive fixed rates.
Fora Financial business loans
Finder Rating: 4.1 / 5: ★★★★★
Fora Financial business loans
$5,000 – $500,000
Varies
6+ months in business, $12,000+ monthly revenue, no open bankruptcies
Get qualified for funding in minutes for up to $500,000 without affecting your credit score. Best for companies with at least six figures in annual revenue.
Lendio business loans
Finder Rating: 4.75 / 5: ★★★★★
Lendio business loans
$500 – $5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.
ROK Financial business loans
Finder Rating: 4.7 / 5: ★★★★★
ROK Financial business loans
$10,000 – $5,000,000
Starting at 6%
Eligibility criteria 3+ months in business, $15,000+ in monthly gross sales or $180,000+ in annual sales
A connection service for all types of businesses — even startups.
Fundbox lines of credit
Finder Rating: 4.2 / 5: ★★★★★
Fundbox lines of credit
$1,000 – $150,000
Not stated
6 + months in business, $100,000+ in annual revenue, 600+ credit score
Get flat rate, short-term financing based on the financial health of your business, not your credit score.
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Secured business loans require collateral

A secured business loan requires you put up some type of collateral against your loan should you default. Collateral can be a piece of property, equipment for your business or any other valuable asset, either personal or commercial. Providing collateral means you may have access to lower interest rates and higher loan amounts than with an unsecured loan.

However, if you fail to make your loan payments on time, the lender has the right to seize your asset to cover your remaining debt and any other accumulated expenses since default.

Here’s the difference between secured and unsecured business loans

Secured loans mean less risk for the lender

Less risk for the lender typically means a better deal for you: You'll have access to larger loan amounts and lower interest rates. This is a great choice for established businesses with reliable cash flow to make regular payments.

Any item of value can be used for collateral

The assets most commonly used to secure a business loan are commercial and residential property. Depending on the lender and the amount you want to borrow, you may be able to use the following assets as security:

  • Business inventory
  • Business equipment
  • Future invoices
  • Personal vehicles
  • Commercial vehicles
  • Fine art and jewelry
  • Personal savings

If you don’t have any of these assets and don’t own your property outright, you still could use your property as collateral. You don’t necessarily need to own it to offer it as security. Access the equity you have in your personal or business property to get the funding you need with business equity loans.

If you don't have any assets at all, you might need to consider an unsecured business loan. Unsecured loans don’t require collateral but tend to have stricter eligibility criteria.

How much collateral is needed for a business loan?

Your lender can repossess your asset if you default on payment

Defaulting on payment could have serious consequences for the future of your business, especially if you used property as collateral. Even worse, if you listed a personal asset as collateral, you’ll lose more than an important part of your business.

As with any other loan type, you should always be wary of borrowing more than you can afford to repay. Be aware of how much regular payments are and the total cost of the loan once it’s fully paid off before you sign on the dotted line.

Collateral and a strong repayment history are in your favor

Businesses that can provide collateral and have a history of repaying its debts will likely qualify for a secured loan, however you can set yours apart with these strong points:

  • Business history of at least six months in operation — or up to two years in some cases — are what most lenders require for most businesses.
  • Business financial strength like your business’ profit and loss statements, average monthly turnover and income projections are what lenders will use to determine if you can make your repayments.
  • Appropriate asset to provide security for the amount you wish to borrow. The asset you choose should be high-value — such as vehicles, art or jewelry. If you want to sell the asset used to secure your loan during the loan term, you must first get your lender's approval and replace it with another asset.

Application checklist

Secured business loans are different than secured personal loans and require a bit more work up front. These five points should help guide you toward a loan your business will be able to repay.

  • Your assets' value will help determine how much your lender can give you. No matter what your asset is, have it professionally appraised to know how much it's worth.
  • Your business plan that details how you intend to use your loan is what lenders will want to see. Without one, you’re unlikely to be approved.
  • Credit scores — both your personal and business credit scores — determine your interest rate and how much you can borrow, even with a secured loan.
  • How much you need to borrow clearly stated in your business plan will get you the funds you need. Too little could result in more loans in the future. And too much could put you in a poor financial position.
  • Your repayment plan can be set to monthly, though some require weekly or even daily repayments. Before you sign on to a loan, know if your business can comfortably meet the monthly payments to avoid default.

Bottom line

A secured loan can be great for a business looking to expand or a new business wanting to buy property or expensive equipment. Although it comes with a certain amount of risk should your business default, the low rates and higher loan amounts make secured business loans a strong option for companies of all sizes. Compare more business loan options to find a lender that suits your business needs.

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