Small Business Loans

Secured vs. Unsecured Small Business Loans

Unsecured small business loans typically range between $5,000 and $500,000. Unlike secured loans, these do not require property (whether commercial or residential) to be used as collateral. However, lenders generally require a General Security Agreement (GSA) over the company along with a director’s guarantee. Due to the increased risk, unsecured business loans tend to have higher interest rates and associated fees compared to secured loans.

Secured small business loans can provide funding of up to $2 million. These require collateral in the form of property, which the lender holds until the loan is fully repaid. Since they offer reduced risk to lenders, secured loans come with lower interest rates and fees compared to unsecured loans.

Why Consider a Small Business Loan?

Small business owners may require additional financial resources to support their businesses for various reasons, including:

• Enhancing Cash Flow

Managing cash flow gaps due to mismatched credit terms between suppliers and clients or fluctuations in revenue and expenses.

• Reducing Costs Through Bulk Purchases

Taking advantage of supplier discounts and cost savings when placing larger orders.

• Business Growth and Expansion

Hiring more staff, launching new locations, funding marketing campaigns, or acquiring other businesses.

• Acquiring Equipment and Inventory

Purchasing new stock and upgrading outdated equipment to meet operational demands.

• Reinvesting Retained Profits

Utilizing retained earnings to reinvest in business improvements.

• Upgrading Business Premises

Performing renovations, refits, or aesthetic upgrades to enhance the business environment.

• Handling Unexpected Costs

Addressing unforeseen expenses such as repairs, additional labor costs, rising insurance premiums, and increased material or energy expenses.