Typical forms of collateral, also called security, are residential or commercial property, vehicles, machinery or other equipment. The application process is quick and easy, as long as the business can provide a form of security against the loan.
It’s easy to understand the difference between secured business loans and unsecured business loans. The first one allows the borrower to gain access to funding by putting down an asset as collateral against the loan; the second one does not require that you have an asset or property as collateral. Not necessarily secured loans are good debts and unsecured loans are bad debts.
Traditionally secured business loan lenders are able to offer lower interest rates than a lender which only provides unsecured business loans. These two business loans products are based on a different level of risk. This results in a higher interest rate for an unsecured business loan but a more straightforward application process and less lending criteria to meet.
Secured business loans have a lower risk and therefore, a lower interest rate, but a slightly longer application process and more eligibility criteria that borrowers have to satisfy. The advantage of applying for an unsecured business loan is that a business does not need to put down assets as collateral. However, unsecured business loans are generally of a smaller amount and higher interest rate than secured business loans due to the risk to lenders.
At Every Business Loan, we talk to our clients to understand their needs and most importantly, their chances to qualify for a secured business loan. Lending criteria may change from lender to lender. Therefore we work with and for our clients to achieve the best deal with one of our partners.
At Every Business Loan, we work with over 50 lenders. Even though the secured business loan is defined as a longer-term loan by nature than an unsecured business loan, our partners can offer secured business loans to up to 15 years, and it is possible to negotiate the repayments amount and terms. A secured business loan usually has longer repayment terms than unsecured business loans.
Secured business loans are one of the preferred financial solutions because the interest rate is relatively low, and it allows a business to schedule repayments for an extended period. We have many partners that offers this type of credit. They usually take a low risk because the loan, as the name says, is secured against an asset, which means that in case of failure of repayment, the lender can claim against the collateral that the loan is secured against. Despite the more favourable conditions, many Australian businesses are not willing to provide collateral, and therefore they often choose an unsecured business loan.
Many small Australian businesses prefer to avoid a secured business loan because they prefer to avoid the disadvantages mentioned above. An unsecured business loan may be more suitable.
Partnering with over 50+ business loan providers at Every Business Loan, we unlock credit opportunities for your business. Our clients in 99% of the cases get the money in their bank account within 24 hours from the application.
Thanks to our industry knowledge, we guide you through the process to find the lender that can provide the type and size of business loan that you are looking for. Our portfolio of lenders fund eligible small businesses with secured business loans. Let us help you to find the one that best suits your needs. It all starts with an enquiry. Call Every Business Loan on 1300 920 905 or click on “get started now” and we call you back to see if you qualify for a secured business loan or unsecured business loan.
Our lenders usually require a combination of the below as a part of an application:
Every Business Loan is a leading and trusted finance broker that makes the process of business funding fast and easy for all our clients throughout Australia.
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Level 32 ,101 Miller Street,
North Sydney NSW 2060
Phone: 02 7208 8220