Best Secured Business Loans in December 2025
Secured business loans use cash deposits, business assets or real estate to reduce lender risk, potentially unlocking better rates and terms.
| Lender | Starting rate | Amount | Term | Time in business | |
|---|---|---|---|---|---|
|
31.30% (suffix) |
$5k – $250k |
18 – 24 months | 12 months |
Secured business lenders at a glance
Best for: Fast funding – OnDeck
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- Same-day funding available
- Fair to low credit accepted
- Can help build business credit
- Interest rates can run high
- Charges an origination fee
- Funding not available in North Dakota
If you need fast funds to cover a short-term need, such as a seasonal downturn or limited-time opportunity, OnDeck can be a great option. The lender offers same-day funding up to $100,000 in some locations — and if you don’t qualify for same-day funding, their timeline is still speedy at two to three business days. Additionally, the lender’s flexible collateral requirements make it more accessible than other types of traditional financing.
However, OnDeck typically offers higher interest rates than competitors. Additionally, you’ll need to be prepared to make daily or weekly payments.
Read our full OnDeck review.
In order to qualify for a secured term loan, you’ll need to meet OnDeck’s criteria of:
- Minimum credit score:
- Minimum time in business: 12 months
- Minimum annual revenue:
What is a secured business loan?
A secured loan is a type of small business financing where the borrower pledges collateral to help minimize lender risk.
Collateral is typically an asset the lender can seize if you default on the loan. For small businesses, assets like equipment, cash savings or real estate can often serve as collateral for secured business loans.
Since the collateral acts as a guarantee for the funds, startup businesses and businesses with bad credit may have better success obtaining a business loan with collateral over an unsecured loan.
How to secure a business loan
There are several ways to secure business loans with collateral:
- Savings: Lenders often prefer cash as collateral since its value is more liquid.
- Property: You could pledge property as collateral for a loan, such as your home, car or commercial real estate. Since the value can be hard to determine, your lender may require an appraisal.
- Inventory: This is a less tangible asset than cash savings and, like other forms of property, may require an appraisal.
- Invoices: You can leverage your unpaid invoices to get access to funding.
- Equipment: Lenders typically view equipment you want to purchase as collateral since they can repossess it if you default on the loan.
- Blanket lien: Also called a Uniform Commercial Code (UCC) filing, this gives lenders the legal right to seize your business assets if you default on a loan. Lenders may require this on its own or in addition to another form of collateral to ensure they are protected.
Types of secured business loans
Almost any type of business loan can be secured if you provide a form of collateral. Here are the most common financing options that typically require collateral.
Backed by the U.S. Small Business Administration (SBA), the SBA loan program offers low interest rates and reasonable repayment terms to borrowers who wouldn’t otherwise qualify for small business financing.
The SBA 7(a) loan is ideal for day-to-day working capital expenses, while the SBA 504 loan can help finance more significant projects, like expansions or equipment. While SBA loan requirements vary by lender, you must provide collateral for loans over $50,000.
If you need a lump sum of cash upfront, secured small business term loans typically have lower interest rates and more flexible repayment terms. For more significant projects, a long-term business loan can provide up to $5 million with repayment terms from seven to 25 years.
A business line of credit is similar to a credit card: You get approved up to a certain limit and can draw from that amount as often as needed. Interest is typically applied to the withdrawn amounts, although some lenders may charge additional maintenance or withdrawal fees.
Equipment loans can help companies purchase or upgrade essential equipment and machinery needed to keep their businesses running smoothly. Since the equipment acts as collateral, equipment financing typically has more lenient eligibility requirements compared to other types of secured business loans.
While you might need to provide a 20% down payment, lenders like offer 100% financing with no down payment.
Businesses can use commercial real estate loans to purchase commercial property. The financed property typically acts as collateral, allowing the lender to seize it if you fail to repay the debt.
If applying for a bank or credit union business loan, you’ll likely need a minimum two-year business history, consistent revenue and a down payment to qualify.
Accounts receivable financing, also called invoice financing, provides quick access to cash by using a company’s unpaid invoices as collateral. This form of financing differs from invoice factoring, which involves selling your unpaid invoices to a factoring company in exchange for a cash advance.
Secured vs. unsecured business loans
Unlike secured business financing, you typically don’t need to provide collateral with unsecured business loans. However, your lenders may still require a personal guarantee or blanket lien on your business assets as an extra layer of protection.
Here are some other key differences between unsecured and secured small business loans:
| Secured business loan | Unsecured business loan | |
|---|---|---|
| Loan terms | Collateral can allow for longer repayment terms | Typically short term due to increased risk for the lender |
| Interest rate | Interest rates tend to be lower because of reduced lender risk | Interest rates tend to be higher for business loans without collateral |
| Credit score | Lenders may be more lenient on credit score requirements | Lenders may impose higher credit score requirements |
Pros and cons of secured business loans
Pros
-
Easier qualifications
Collateral typically allows lenders to offer lenient eligibility requirements. -
More favorable terms
Lenders can provide longer terms and possibly lower interest rates due to reduced risk. -
Greater flexibility
Providing cash or real estate assets can often open the door to more finance options.
Cons
-
Loss of collateral
You risk losing your collateral if you can’t make payments. -
Slower time to funding
The approval and funding time can take longer if lenders need to appraise the value of your collateral. -
Additional fees
You may have to deal with origination fees based on the amount financed.
How to get a secured business loan
Ready to apply for a secured business loan? Here are six steps to help you get a small business loan.
1. Calculate how much you need
Review your business budget to estimate your funding needs. Also consider whether you want to receive funds all at once or spread out over time. Although secured loans typically offer lower interest rates, you could end up paying more if you opt for a longer repayment term.
Use our business loan calculator to estimate your borrowing potential.
2. Evaluate your business qualifications
Review each lender’s general business loan requirements online, such as minimum credit score, annual revenue and collateral requirements. While alternative lenders typically have more lenient requirements for secured business loans, you’ll likely pay higher rates than with traditional financing.
Having a high credit score can improve your chances of approval and help secure a more competitive rate. LendingTree Spring can help monitor your score for free to see where you stand.
3. Choose your collateral
Collateral requirements vary by lender and loan type. In general, you could pledge equipment, real estate, invoices or financial assets as collateral for business loans. If you can’t meet the lender’s collateral requirements, you may want to consider unsecured business loans instead.
4. Compare secured business lenders
You can apply for secured business loans via traditional banks, credit unions or online lenders. Watch out for hidden fees, which can increase the overall cost of your loan. Also, make sure the lender reports on-time payments to the major credit bureaus so you can establish and build your business credit.
You can read small business lender reviews before applying to find the best options for your needs.
5. Gather required documents
Lenders typically require certain documents during the application process. While the exact documents will vary, here’s a general idea of what you’ll need:
- Business plan
- Personal and Personal and business tax returns
- Financial statements, including income statements and balance sheets
- Copies of your articles of incorporation, bylaws or operating agreement
- Business licenses and permits
- Lease agreements, if applicable
- Certificate of good standing
6. Apply and review
Most secured business loan applications can be completed online, but some lenders might require a phone call or in-person visit. Since the lender has to review your assets, secured business loans typically take longer to approve and fund.
For example, it can take months to receive your funds after being approved for an SBA loan, although you can reduce this timeline to two weeks by working with an SBA-preferred lender.
Make sure to review all loan offers to ensure you understand the rates, repayment term and additional fees.
How to compare business loans
Consider the following loan details when picking the best secured business loan for your needs:
Interest rate
Business loan interest rates can vary greatly based on lender and the loan type. Pay attention to whether the rate is variable or fixed, which can affect your payments over the long run. Going with the lowest interest rate will often save you the most during the loan’s duration.
Repayment term
Home equity loans work like a second mortgage and your home is used as collateral. They allow consumers to borrow against the equity they’ve built in their homes while paying off their mortgages.
Time to fund
If you need funds fast, you might want to consider a quick business loan with an alternative lender. In some cases, you could receive funds one to three business days after approval. However, you typically have to pay higher interest rates with fast business loans.
Additional fees
Read the fine print in your business loan agreement for extra fees, such as origination fees, late charges and business loan prepayment penalties.
Loan purpose
Some lenders restrict how the loan funds can be spent. In general, a working capital loan can fund most business expenses, such as payroll, inventory, expansions and more.
Alternatives
If you can’t provide collateral to secure your loan, here are some other funding options to consider.
Unsecured business loans
You typically don’t need to provide physical or financial assets to qualify for unsecured business loans. And some loan types, like equipment financing and commercial real estate loans, don’t require advance collateral since the purchase item helps secure the loan.
However, you will often need to sign a personal guarantee and/or business lien when getting an unsecured business loan to help reduce lender risk.
Startup business loans
New businesses without an established credit history or solid annual revenue could consider startup business loans from alternative and traditional lenders. These lenders often take a “big-picture approach” by looking at your business’s potential for growth instead of requiring robust credit scores. That said, you typically need to operate for at least six months to qualify for startup financing.
Small business grants
Small business grants are available from local and nationwide government and nonprofit organizations, as well as private companies. You can search for grants based on your type of industry, location, age, military status and more. Although small business grants tend to be competitive, scoring free money for your business can be worth the effort.
Business credit cards
If you want to finance day-to-day expenses, business credit cards are another option to consider. Eligibility criteria is usually less stringent than traditional financing, plus you can earn bonus and business travel rewards along the way.
Note that credit card interest rates can run significantly higher than traditional loans. Because of this, it’s best to pay off your balance in full each month.
Crowdfunding
Crowdfunding for business can help raise money for specific business projects or goals. It’s free to create a business profile, start a campaign and collect donations from friends, family and the public — although most platforms take a small fee from your donations. Crowdfunding tends to work best for businesses offering a specific product as an incentive.
Frequently asked questions
Both secured and unsecured business loans exist. With a secured loan, you’ll need to pledge collateral, such as property or cash. While unsecured loans don’t usually require collateral, you can expect lower borrowing limits and higher interest rates.
Compared to unsecured loans, secured loans have a higher chance of approval since the collateral reduces lender risk. But, because the collateral will need to be appraised, it may take longer to get your funds.
Since many lenders require a one- to two-year business history to qualify for financing, getting a secured startup business loan could be challenging. However, some lenders work with early stage startups, such as online lender , which offers secured finance options for companies less than a year old.
If you have a lower credit score, providing collateral could help reduce your risk to lenders. In addition, equipment financing tends to accept lower credit scores since the equipment acts as collateral. For example, offers equipment financing to business owners with credit scores as low as 600.
The turnaround time for secured business loans varies based on the lender and loan type. In general, online business loans have quick processing times, allowing you to receive a decision within minutes. Often, the funds are deposited on the same day or within a few business days. In comparison, an SBA or traditional bank loan is more time consuming, with funding times lasting up to 90 days.
Our methodology: How we chose the best secured business loans
We reviewed 20 leading small-business lenders to determine the overall best seven secured business loans. In addition to requiring some form of collateral, the secured business loan lenders on our list must meet the following criteria:
- Rates and terms: We prioritize lenders with competitive rates, limited fees, flexible repayment terms, a range of loan amounts and APR discounts.
- Repayment experience: We consider each lender’s reputation and overall business practices, favoring lenders that report to all major credit bureaus, offer reliable customer service and provide customer perks, like free business coaching and in-person support.
- Qualification criteria: We factored in time in business requirements and minimum credit scores, and included lenders that are accessible to a wide range of business owners.