9
Best Secured Business Loans
OnDeck
Loan amounts
$5,000 to $250,000
APR range
Varies by loan
Minimum Credit Score
625
$5,000 to $250,000
Varies by loan
625
Eligibility
- Minimum credit score: 625
- Time in business: One year
- Minimum revenue: $100,000 per year
Turnaround time
You can apply and receive a decision from OnDeck on the same day.
Compare the Best Secured Business Loans
| COMPANY | FORBES ADVISOR RATING | LOAN AMOUNTS | APR | LEARN MORE |
|---|---|---|---|---|
 
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$25,000 to $500,000
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As low as 7.49%
|
From participating partners via businessloans.com's website.
| |
|
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$500 to $5 million
|
As low as 3%
|
On Lendio's Website
| |
|
$5,000 to $250,000
|
Not disclosed
|
Via Forbes Advisor
| |
|
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$100,001 to $3 million
|
Based on WSJ Prime
|
Via Forbes Advisor
|
Best Secured Business Loans: A Closer Look
BEST FOR ESTABLISHED BUSINESSES
Funding Circle
Loan amounts
$25,000 to $500,000
APR range
As low as 7.49%
Minimum Credit Score
660
$25,000 to $500,000
As low as 7.49%
660
Funding Circle has been a direct lender specializing in small business loans since 2010. It has helped 135,000 businesses in 700 industries and lent $20.2 billion globally. We chose Funding Circle because it provides fast, affordable loans with a simple application process and funding in as little as 48 hours. Prospective borrowers have three options: business term loan, line of credit or SBA loan.
Funding Circle term loans range from $25,000 to $500,000 with repayment terms from six months to five years. If you choose to apply for a business line of credit, you can access credit lines between $6,000 and $100,000. However, Funding Circle doesn’t specify its line of credit repayment terms. You can also apply for Funding Circle SBA loans, which range from $25,000 to $500,000 with terms up to 10 years.
There is one main drawback of Funding Circle: There’s a one-time origination fee on each loan ranging from 3.49% to 6.99% of the approved loan amount.
- Loans from $25,000 to $500,000
- Funding in as little as 48 hours
- No minimum annual revenue requirement for most loans
- One-time origination fee between 3.49% to 6.99% of the approved loan amount
- Requires two years in business, so it’s not ideal for startups
- Not available to Nevada businesses
Eligibility
- Minimum credit score: 660 for most loans; 650 for SBA loans
- Time in business: Two years
- Minimum revenue: None for most loans; $400,000 per year for SBA loans
Turnaround time
Depending on the loan type, you can receive your funds within two days. However, SBA loan funding may take up to two weeks.
BEST FOR A LENDER COMPARISON SITE
Lendio
Loan amounts
$500 to $2 million
APR range
As low as 3%
Minimum Credit Score
600
$500 to $2 million
As low as 3%
600
Lendio is an online business loan marketplace that connects prospective borrowers with traditional banks and nonbank online lenders. By filling out one application, business owners are able to connect to over 75 lenders. Over its existence, Lendio has helped small business owners receive over $12 billion in funding nationwide.
Applicants may see Lendio as a one-stop shop. You can apply for business loans, lines of credit, SBA loans, equipment financing, merchant cash advances (MCAs), commercial mortgages, invoice factoring and business acquisition loans. However, because Lendio is a marketplace and not a lender, it doesn’t publish specific terms. Instead, you’ll have access to its lending partners, and it will help you find the best offer for your specific needs.
- One application connects you to more than 75 lenders
- Wide variety of loan products, including term loans, lines of credit and SBA loans
- Some lenders charge prepayment penalties
- Terms and funding times vary depending on specific lender
Overview
Lendio is an online business loan marketplace that connects prospective borrowers with traditional banks and nonbank online lenders. Over its existence, Lendio has helped small business owners receive over $12 billion in funding nationwide.
Applicants may see Lendio as a one-stop shop. You can apply for business loans, lines of credit, SBA loans, equipment financing, merchant cash advances (MCAs), commercial mortgages, invoice factoring and business acquisition loans. However, because Lendio is a marketplace and not a lender, it doesn’t publish specific terms. Instead, you’ll have access to its lending partners while helping you find the best offer for your needs.
Eligibility
- Minimum Credit Score: 560
- Time in Business: Six Months
- Minimum Annual Revenue: $50,000
Funding time
Applying through Lendio takes 15 minutes. After you review your offers and are approved by your lender, you can receive your funds in as little as 24 hours.
BEST FOR EQUIPMENT FINANCING
Balboa Capital
Loan amounts
$5,000 to $250,000
APR range
Not disclosed
Minimum Credit Score
620
$5,000 to $250,000
Not disclosed
620
Balboa Capital gets an A+ rating from the Better Business Bureau (BBB) and has funded over $7 billion in loans in the U.S. If you need a short-term loan, Balboa Capital offers options from $5,000 to $250,000 .
You can fill out an application online, and you could get an approval within an hour. Borrowers can choose from loan terms between three and 24 months. While excellent credit isn’t needed to qualify, the higher your credit score, the better your interest rate will likely be.
- Loans from $5,000 to $250,000
- Online application with quick funding
- May qualify with just a year in business
- $300,000 annual revenue requirement
- Not suited for new businesses
Eligibility
- Minimum credit score: 620
- Time in business: At least one year
- Minimum annual revenue: $300,000
Turnaround time
In some cases, you may be able to apply and get funding within the same day.
BEST FOR LARGE LOAN AMOUNTS
PNC Bank
Loan amounts
$100,001 to $3 million
APR range
Based on WSJ Prime
Minimum Credit Score
PNC Bank does not disclose this information
$100,001 to $3 million
Based on WSJ Prime
PNC Bank does not disclose this information
PNC is one of the largest banks in the U.S. and offers a variety of small business loans. If you want to borrow a large sum for equipment or machinery, PNC offers up to $3 million in funding to qualified borrowers.
PNC Bank’s secured business loans can be backed by machinery, equipment or other property (excluding real estate). Monthly payments are automatically deducted from your bank account for convenient repayment, and interest rates may be fixed or variable. Loan terms vary from two to seven years, giving you a short or extended term to pay off your debt.
Business owners have the flexibility to apply for loans online, by phone or in a branch.
- Large loan amounts
- Fixed and variable interest rates
- Payments automatically deduct from your bank account each month
- Collateral required
- Minimum loan amount of $100,001
- You must be a PNC customer to apply online
Eligibility: PNC generally works with business owners who have a personal credit history that’s at least five years long with no adverse credit history or recent late payments. You may need to be in business for at least three years and have a business credit history of on-time payments with no bankruptcy, judgments or liens to qualify.
Funding Time: Unsecured small business loans from PNC may be funded within three days of approval and document verification, but secured loans may take longer.
Most Popular is calculated from the number of times each affiliate product was selected by Forbes Advisor users over a six month time period.
Methodology
We reviewed popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:
- Loan cost: 35%
- Loan details: 25%
- Customer experience: 20%
- Eligibility and accessibility: 10%
- Application process: 10%
Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.
Tips to Compare Secured Business Loans
Consider these tips when comparing secured business loans:
- Check if you’re eligible. Business owners with poor credit may not be eligible for unsecured loans, meaning that a secured loan might be your only option anyway. Still, review your preferred lender’s qualification requirements to ensure you’re eligible.
- Consider your collateral options. Secured business loans require collateral like real estate or other valuable business assets, while other financing does not. If you’re not comfortable pledging collateral for a loan, opt for an unsecured business loan.
- Compare interest rates. Interest rates can drive up the overall cost of your loan. Be sure to compare rates among secured business loans when choosing your preferred lender.
- Consider the loan amount. Make sure your preferred lender offers loan amounts that meet your business spending needs.
What Is a Secured Business Loan?
A secured business loan is most commonly a type of term loan that’s secured by your business assets. If you default on the loan, your lender can repossess the assets you pledge as collateral. You receive your funds as a lump sum amount, owe interest on the full loan amount and make fixed monthly payments until it’s repaid.
However, in some cases, secured business loans may be structured as business lines of credit. These loans require the same level of collateral but provide a revolving credit line that you can reuse as you repay your balance.
Secured vs. Unsecured Business Loans
The main difference between secured and unsecured business loans is that secured loans are backed by some sort of collateral. Collateral represents any asset that you give the lender permission to repossess in the event that you default.
Collateral is a way for the lender to reduce the risk of the transaction and guarantee that it will recoup its money. Unsecured loans require no collateral, and the only way for the lender to get its money back if you default is to take you to court—an expensive and time-consuming process.
Because lenders take on less risk when they give you a secured business loan, they may offer you better terms. For example, you might get lower rates, higher borrowing amounts or longer terms.
How Do Secured Business Loans Work?
For the most part, secured business loans work similarly to any other type of unsecured term loan or line of credit, depending on their specific structure. However, secured loans require collateral.
When you’re applying for a secured business loan, your lender will dictate what type of collateral it requires. Some common types of collateral include:
- Cash. Lenders often prefer to use the money held in your business bank account as collateral because it’s a straight one-for-one transaction, with no need to sell your business assets.
- Equipment. You may also use your existing business equipment for secured loans. With equipment financing, you can also use the equipment you’re purchasing as collateral, similar to how a car loan works.
- Inventory. You may use existing inventory as collateral, but your lender would need to sell it in order to get the cash.
In addition to providing business assets as collateral, your lender may require you to personally guarantee the loan. This means that if your business defaults, you’ll need to repay the loan with funds from your personal accounts.
How to Get a Secured Business Loan
The business loan application and underwriting process varies by lender, but most banks and lenders follow the same general guidelines. To get a small business loan, expect to follow these general steps:
- Determine your loan specifics. Some lenders limit what industries they’ll finance or how loan funds may be used, so determine how you’ll use the cash before applying for a loan. Also evaluate how much you need to borrow, as this may impact the type of loan you apply for and the best lenders to approach for funds.
- Familiarize yourself with your credit profile. Lenders typically look at a business owner’s personal credit score when evaluating a loan application. You should have a score of at least 680 to qualify for an SBA loan or a traditional bank loan, and 630 for equipment financing or business lines of credit. Short-term financing and merchant cash advances typically have less stringent requirements—averaging around 600 and 550, respectively.
- Research lenders. When shopping for a small business loan, determine whether your current bank offers small business loans that meet your needs. This can streamline the application process because the bank will already have your financial information on file. Next, research other banks, credit unions and online lenders to compare available loan amounts, repayment terms and rates.
- Gather required documentation. Required documentation varies by lender. However, most lending institutions require a business plan, at least 12 months of personal and business bank statements, tax returns for at least two years and details about any current and past business loans. Lenders also require copies of applicable business licenses and legal documents, details about available collateral and a description of how loan proceeds will be used.
- Submit a formal loan application. Once you research the best secured business loans and prepare your business for due diligence, submit a formal loan application. The process varies by lender, so familiarize yourself with the application process and contact customer service with questions.
It’s generally easier to qualify for a secured business loan than for an unsecured business loan. However, finalizing the collateral portion of your application might take some work before you’re able to get the money. Your lender may require an independent appraisal to ensure that the value of the collateral covers the cost of your loan if you default.
If you’re approved for the loan, many lenders will file something called a “UCC-1 filing” or “UCC lien” with your secretary of state. This is a public claim saying that your lender has rights to some or all of your business assets if you don’t repay your debt obligation. The lien is typically removed once you repay your loan.
Find the Best Startup Business Loans
Frequently Asked Questions (FAQs)
What's the difference between a blanket lien and a specific lien?
Lenders who offer secured loans may file either a blanket lien against all of your business assets or a specific lien against only certain assets like a piece of equipment. Blanket liens can make it harder to find additional sources of funding, whereas it might be easier with specific liens since additional lenders can claim other parts of your business as collateral.
What can you use a secured business loan for?
You can use a secured business loan for just about anything business-related. Some of the most common reasons are to buy tangible goods, like equipment that you need to operate your business or inventory that you can sell.
How do I remove a UCC lien after I've repaid the small business loan?
Lenders should remove any UCC liens after you repay the loan, but that’s not always the case.
Check your business credit report after you’ve paid off the loan to see if it lists the UCC lien. If it does, contact your lender and ask them to file a UCC-3 form with your secretary of state to remove the lien.