A secured business loan is backed by collateral, such as equipment or business assets, that the lender can claim if the loan is not repaid. An unsecured loan has no specific collateral and relies on your revenue, credit and often a personal guarantee. Secured loans are usually easier to qualify for; unsecured loans are faster to arrange.
Key facts
| Financing type | Business Financing |
|---|---|
| Typical amounts | Term loans $25K–$2M; equipment financing $10K–$500K |
| Decision time | As fast as 24 hours |
| Credit | All credit profiles considered; soft credit pull to start |
| Cost to apply | Zero cost to apply |
| Who we are | A business financing broker. We compare offers from our lender network; we are not a direct lender. |
In detail
The lender takes a legal claim on an asset, often recorded as a UCC lien. Equipment financing is the clearest example: the machine or vehicle you buy is the collateral. Because the lender can recover value if you default, secured loans can be easier to qualify for and may carry longer terms.
In detail
No specific asset is pledged. The lender decides based on revenue, time in business, credit and cash flow, and usually asks for a personal guarantee. Approval can be quick, but the cost is often higher because the lender carries more risk. Many term loans and working capital products work this way.
In detail
The labels are not strict. An unsecured loan can still include a blanket lien on business assets, and a personal guarantee can put your own assets at risk. Larger loans are more likely to ask for one or both. Read the lien and guarantee clauses before you sign.
In detail
Buying a specific asset points to secured equipment financing. A short cash gap with strong deposits points to an unsecured working capital product. If your credit is limited, a secured option may open doors an unsecured one will not.
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Product paths
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What is a UCC lien?
What is a personal guarantee?
Business loans with no collateral
How equipment financing works
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A secured loan is backed by collateral the lender can claim if you default. An unsecured loan has no specific collateral and is approved on revenue, credit and cash flow, often with a personal guarantee.
Yes. The equipment you buy serves as the collateral, which is why equipment financing can be easier to qualify for than an unsecured loan.
Yes. Many unsecured loans include a personal guarantee, and some file a blanket lien on business assets. Check the contract for both.
Either. Many are unsecured, especially for smaller amounts, while larger loans are more likely to require a lien or a personal guarantee.
Written by lendfloCapital Editorial Team · Last updated
lendfloCapital is a business financing broker, not a lender. This page is general information, not financial, legal or tax advice. Rates, amounts and terms depend on the lender and your business.
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