Explore our guide to various types of Secured Business Loans. Whether you’re considering collateral-based options or seeking insights into secured financing solutions, we’ve got you covered.
SECURED BUSINESS LOAN TYPES
Below are your informational guide to all different types of Secured Business Loans.
Factoring | Small SBA Loans | Large SBA | ||
Credit Score | Credit Score | Credit Score | Credit Score | Credit Score |
Time in Business Any | Time in Business | Time in Business | Time in Business | Time in Business |
Monthly Revenue | Monthly Revenue | Monthly Revenue | Monthly Revenue | Monthly Revenue |
Loan Amount | Loan Amount | Loan Amount | Loan Amount | Loan Amount |
10% – 25% | 7% – 15% | 8% – 36% | <10% | 7% – 18% |
| Benefits: Perfect credit not required. | Benefits: Low APR, Fixed or variable rate. Start Up Financing. Commercial property financing. low down payment. | Benefits: Lowest interest rate to buy equipment than MCA ,Tax deductible and depreciation benefits, Own the equipment outright. Monthly payment. | Benefits: Lowest interest rates of all types, Longer terms, Can borrower larger amount. | Benefits: Investment 4+ Unit Commercial Real Estate is still booming. Earn equity on property, Built in collateral |
| Drawbacks: Customer may rather deal directly with business, Depending on the situation can be a higher cost. | Drawbacks: Longer application process, Require a personal guarantee or collateral and down payment. | Drawbacks: Equipment can become outdated. Higher down payment for bad credit. No early payoff discount. | Drawbacks: Application is time consuming, Long time to approval and funding, Down payment required. | Drawbacks: LTV is never 100%. Must include plans to build a structure. Longer application process. |
| Apply Now | Apply Now | Apply Now | Apply Now | Apply Now |
Invoice | Full financial package + year-to-date financials | 1-2 years tax returns (only if request is over $75 | 3 years tax returns | Borrower Financial Statement (PFS) |
AR Aging Report | and FICO score | 000) | personal financial statement | Personal Tax Return(s) |
P&L | higher requirements. Net worth is a must. | 3 months business bank statements | year-to-date financials | Business Federal Tax Return(s) |
One (1) year tax return (most recent)’Six (6) months Bank Statements | Invoice or Quote for equipment to be financed | and FICO score. | Business Financial Statement(s) | |
Interim Balance Sheet (Partial Year) | ||||
Notes Payable Schedule | ||||
Projections | ||||
Rent Roll (Investment or Multi-Family Commercial Real Estate) | ||||
Appraisal(s) | ||||
Environmental Site Assessment(s) | ||||
Site Visit / Pictures | ||||
Survey(s) | ||||
Title Policies |
What is Secured Business Loan?
- Definition: Secured business loans are loans that are backed by collateral, which is an asset or assets that the borrower pledges to the lender as security for the loan. If the borrower defaults on the loan, the lender can seize the collateral to recoup their losses.
- Key Points:
- Collateral: Required, which can be real estate, equipment, inventory, accounts receivable, or other valuable assets.
- Risk: Lower risk for lenders because they have a way to recover their funds if the borrower defaults.
- Interest Rates: Generally lower compared to unsecured loans due to the reduced risk for the lender.
- Eligibility: Easier to qualify for if the borrower has valuable collateral to pledge.
- Examples: Secured loans can include mortgages, equipment loans, and asset-based financing.
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- 619-795-3123
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