Secured business loans
A secured loan is backed by collateral such as real estate, equipment, inventory, or receivables. If you default, the lender can claim the collateral. Equipment financing is a common secured product because the equipment itself is the collateral.
Unsecured business loans
Unsecured loans do not require specific collateral. Approval depends on revenue, credit, and time in business. Most working capital loans and lines of credit from online lenders fall into this category.
Personal guarantees and liens
A personal guarantee makes you personally responsible if the business cannot repay. Some lenders also register a general security agreement — sometimes called a blanket lien — over business assets. Always ask which applies before signing.
Frequently asked questions
Are unsecured business loans harder to get?
Not necessarily. They often require less paperwork and can be approved faster, but rates may be higher because the lender takes more risk.