Securing external funding is part and parcel of operating a small business. The two main options are secured or unsecured small business loans. While unsecured loans have advantages, secured loans are the better option for most people.
Secured loans are more accessible, offer higher borrowing limits with lower interest rates, and can be paid back over an extended period. This post covers everything you need to know about secured vs. unsecured business loans to help you make an informed decision.
Secured Small Business Loans Pros and Cons
Pros
Lenient credit score requirementsLarger borrowing amountsLower interest ratesLonger repayment periods Easier to access Possible tax benefits
Cons
Slower to fund Risk of losing business assetsRequires collateral
Unsecured Small Business Loans Pros and Cons
Pros
No physical collateral required Quicker to fund Simpler application processBuilds credit history
Cons
More difficult to accessHigher interest rates Smaller borrowing amountsShorter repayment period Potential personal guarantee or UCC lien requirements
The 11 Best Business Loans for 2022
The Quick Sprout team has done a lot of research into where to get the best business loans right now. The top 11 are below and you can read our in-depth reviews on each to see which might be the best fit for your business needs.
Bluevine — Best for… Read More