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We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 7 secured business loans
Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
---|---|---|---|---|
Bank of America Business Advantage Secured Term Loan | 4.5/5 Best for Bank secured business loans | Undisclosed | 700 | |
SBA 7(a) loan with Fundera by NerdWallet | Best for SBA secured business loans | $5,000,000 | 650 | with Fundera by NerdWallet |
Bank of America Cash Secured Line of credit | 5.0/5 Best for Secured business loans for startups | Undisclosed | 670 | |
Funding Circle - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Fast secured business loans | $500,000 | 660 | with Fundera by NerdWallet |
Wells Fargo Prime line of credit | 4.5/5 Best for Secured business lines of credit | $1,000,000 | 680 | |
Triton Capital - Equipment financing with Fundera by NerdWallet | 4.0/5 Best for Secured equipment loans | $250,000 | 575 | with Fundera by NerdWallet |
SBA Microloan with Fundera by NerdWallet | Best for Secured business loans for bad credit | $50,000 | 620 | with Fundera by NerdWallet |
Here are 7 secured business loans
Best for Bank secured business loans
Max Amount
Undisclosed
Min. Credit Score
700
Best for SBA secured business loans
Best for Secured business loans for startups
Max Amount
Undisclosed
Min. Credit Score
670
Best for Fast secured business loans
Best for Secured business lines of credit
Max Amount
$1,000,000
Min. Credit Score
680
Best for Secured equipment loans
Best for Secured business loans for bad credit
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Our pick for
Bank secured business loans
Bank of America offers secured business loans with competitive rates and terms. You can secure your loan with business assets or certificates of deposit.
Bank of America Business Advantage Secured Term Loan
Max loan
Undisclosed
Min. Credit score
700
Our pick for
SBA secured business loans
The SBA 7(a) loan offers funding up to $5 million. You’ll typically need to provide collateral for loans greater than $50,000.
SBA 7(a) loan
with Fundera by NerdWallet
Max loan
$5,000,000
Min. Credit score
650
Apr range
11.50-15.00%
with Fundera by NerdWallet
Our pick for
Secured business loans for startups
This Bank of America line of credit is secured by your cash deposit. Startups with at least six months in business may be able to qualify.
Bank of America Cash Secured Line of credit
Max loan
Undisclosed
Min. Credit score
670
Our pick for
Fast secured business loans
You may need to provide personal or business assets to secure one of these online loans. Funding Circle can issue funds in as little as two days.
Funding Circle - Online term loan
with Fundera by NerdWallet
Max loan
$500,000
Min. Credit score
660
Apr range
15.22-45.00%
with Fundera by NerdWallet
Our pick for
Secured business lines of credit
This Wells Fargo line of credit is a good option for established companies with strong revenue. You must secure your credit line with business assets.
Wells Fargo Prime line of credit
Max loan
$1,000,000
Min. Credit score
680
Our pick for
Secured equipment loans
With Triton Capital’s equipment financing, the equipment you purchase serves as collateral on the loan.
Triton Capital - Equipment financing
with Fundera by NerdWallet
Max loan
$250,000
Min. Credit score
575
Apr range
5.99-34.99%
with Fundera by NerdWallet
Our pick for
Secured business loans for bad credit
Although requirements vary based on the lender, many SBA microloan intermediaries will require you to provide some form of collateral. You may be able to qualify, however, with a credit score of 620 or higher.
SBA Microloan
with Fundera by NerdWallet
Max loan
$50,000
Min. Credit score
620
Apr range
8.00-13.00%
with Fundera by NerdWallet
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How do secured business loans work?
How to secure a business loan
- Property. This can include business and personal assets, such as real estate, office or manufacturing equipment, cars or your home.
- Equipment. Equipment you already own can be used as collateral. However, you can also get self-securing financing, in which the equipment you’re looking to buy serves as collateral on the loan. This is known as equipment financing.
- Inventory. Similar to equipment, inventory can be used to secure a loan in two ways. You can use existing inventory as collateral, or you can get inventory financing, in which you use a loan to buy new inventory and that inventory then serves as collateral on the loan.
- Invoices. You can use your outstanding customer invoices as collateral to get a cash advance from a lender. Also known as invoice factoring, lenders advance you a percentage of your unpaid invoice amount, and when your customer pays the invoice, you receive the remaining percentage minus the company’s fees.
- Savings. You can use the cash in your bank account to secure a business loan. Some lenders may prefer cash because it’s the most liquid type of collateral.
- Personal guarantee. A personal guarantee is a legal agreement that holds you personally responsible for your business’s debt and allows the lender to claim your personal assets to cover the debt if your business can’t pay. Sometimes, adding a second person to guarantee the loan, or a business cosigner, can also serve as a way to secure a business loan.
- Uniform Commercial Code lien. A UCC lien gives a lender the right to seize your business’s assets if you can’t repay your loan. A UCC lien is an official document, typically filed with the applicable secretary of state’s office after you’ve signed your loan agreement. Lenders may file a UCC lien on specific business assets such as equipment, or they’ll file a blanket lien, which covers all assets.
Types of secured business loans
SBA loans
Business term loans
Business line of credit
Equipment financing
Commercial real estate loans
Secured vs. unsecured business loans
Secured business loans | Unsecured business loans | |
---|---|---|
Collateral requirements | Typically require physical or financial collateral and may also require a UCC lien or personal guarantee. | Typically require a UCC lien or personal guarantee. |
Loan terms | Tend to be longer because your collateral reduces the lender’s risk. | Tend to be shorter so the lender can be repaid quickly. |
Interest rates | May be lower than unsecured business loans, depending on the lender and your overall qualifications. | May be higher than secured business loans, depending on the lender and your overall qualifications. |
Pros and cons of secured business loans
Using collateral to reduce risk for the lender may help you access larger loan amounts, lower interest rates and longer repayment terms.
Collateral may increase chances of approval; can help newer businesses or borrowers with bad credit qualify.
Assets you use as collateral are at risk if you can’t repay your financing.
Can be slower to fund than unsecured loans, especially if the lender requires an appraisal of your collateral.
Where to get a secured business loan
How to get a secured business loan
1. Determine your funding needs
2. Evaluate your qualifications
3. Identify and assess the value of your collateral
4. Compare secured business lenders
5. Gather your documentation and apply
- Basic information about you and your business.
- Business and personal tax returns.
- Business and personal bank statements.
- Business financial statements.
- Detailed information about your collateral.
6. Review your loan agreement
Alternatives to secured business loans
Find the right business loan
Methodology
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.