What is a secured business loan?

A secured business loan is a type of loan that is backed by collateral, which is a valuable asset owned by the borrower. This collateral serves as security for the lender in case the borrower defaults on the loan. Secured business loans typically offer lower interest rates and larger loan amounts compared to unsecured loans, which do not require collateral. The most common types of assets used as collateral for secured business loans include real estate, equipment, inventory, and accounts receivable.