Secured versus unsecured business funding: Two sides to this coin!

When it comes to getting fuel to drive your business engine, there are many different types of funding to choose from. Of course, getting this part right is critical to your business’ health and the more knowledge that you have the better you’ll be able to start down the path that will lead to a successful enterprise.

It’s important to see the advantages and disadvantages to selecting unsecured or secured business funding. There are two sides to every coin and each of these types of loans has a positive and negative that will make it appealing to different types of enterprises.

No Collateral

As the name suggests, one of the advantages to unsecured business funding is the fact the applicant won’t need any collateral to start the process moving forward. These unsecured loans are also highly flexible and can be used for a variety of different things. Anything from an upgrade to your store or some extra money to cover online marketing or employee expenses is possible. ‎

Credit Requirements

If, on the other hand, you’d rather look into getting a secured loan, you should know right away that you’ll need to meet the bank’s or other lending institution’s credit and other requirements.  However, it’s more often than not the case that you can get a better interest rate with one of these forms of financing since you’ll be putting up some collateral to lessen the risk to the lender.

The other advantage to these secured loans is the fact that you can generally get more money than you can with the unsecured version. By bolstering up your credentials with the lender by using collateral, they generally feel more comfortable about increasing the dollar figures they’re willing to lend you.