Secured Loans for Business

The Wachovia Company suggests starting a business relationship with a secured financing lender before your business becomes in need of money. By building a rapport, your personal and business character will add to the probability of securing a loan. This will also show management experience on your part and will reflect on the strength of your company. Wachovia also suggests looking to family and friends first, even for a secured business loan, because of smaller or no interest rates. Secured loans for small businesses and new businesses are usually easier to receive than unsecured loans because of the fact that your assets may be sold to collect payment. Secured lending officers will look at the strength of your business and its profit profile to determine if a secured loan is right for your business. If you are confident in making secured loan payments, then your business will save money by the lower interest rates that are available through secured financing.

Secured loan decisions can be difficult to make because of the collateral involved that plays up a big risk factor. The pros and cons both of secured loans may be high for businesses. Secured business loans do offer more alternatives to customers than secured personal loans in terms of collateral. For instance, you may not need to list your personal home as an asset if you can instead include your business equipment in the promissory note. Keeping your home or personal vehicle tops number one on the list of priorities when considering your assets.