Best Secured Business Lines of Credit in December 2025
A secured line of credit lets you use your assets to get flexible business financing.
Best secured business lines of credit: More details
What is a secured line of credit?
A secured business line of credit is a type of revolving small business financing that requires collateral to secure the debt. Similar to a credit card, you can draw from your line of credit as often as needed, typically only paying interest on the withdrawn amounts — although some lenders may charge origination or maintenance fees.
To secure your line of credit, your lender may ask for collateral like cash savings, investments, equipment or real estate, which the lender can seize if you fail to repay the debt. In addition to collateral, some lenders may also require one or both of the following:
- Personal guarantee: This holds you personally liable for the debt if your business can’t keep up with loan payments (or if your business fails).
- Business lien: Also called a UCC filing or a blanket lien, this allows a lender to claim some or all of your current and future business assets if you default, such as your revenue, savings, equipment and inventory.
Since providing collateral reduces lender risk, borrowers can often get lower rates and more flexible repayment terms with secured lines of credit.
Unsecured vs. secured business lines of credit
Both secured and unsecured business lines of credit work the same way: You can withdraw up to your maximum credit limit to cover working capital, inventory, payroll, seasonal dips in revenue and more. Once you repay the debt, you can borrow up to the limit again and again. You don’t have to repay the full balance to keep using your credit line — you can access whatever is available, whenever you need it.
The key difference between unsecured and secured credit lines is that unsecured business loans aren’t backed by collateral.
However, most unsecured lines require some form of protection to reduce lender risk, such as a personal guarantee or a blanket lien — especially if you don’t have good credit or high-value assets. Because of this, unsecured business lines tend to have smaller loan amounts, higher rates and shorter repayment terms.
A cash-secured credit line allows you to borrow against a cash deposit or an existing savings account. This can be a low-risk way to build your business credit and reassure lenders you can handle debt without having to pledge high-value assets.
If you secure your line of credit with a certificate of deposit (CD), savings or money market account, you may be able to borrow up to 100% of your balance as often as needed. One benefit is that your savings remains untouched and can continue earning interest. Alternatively, you can fund the account with a security deposit, which is typically refunded at the end of the review period.
To make the most of a cash-secured line of credit, keeping up with regular payments is important. Missing a payment or failing to repay the debt can hurt your credit score and jeopardize your ability to qualify for more significant funding later.
Note that a cash-secured line of credit is considered a stepping stone to more traditional financing options. Since you need to provide initial cash or savings upfront, it’s not ideal for businesses that need additional funding.
Where to get a secured business line of credit
Traditional banks and credit unions
Traditional banks and credit unions typically have the most competitive rates and flexible terms. To qualify, you will likely need at least two years of business history, a solid cash flow and a good credit score, though cash-secured lines might have more flexible requirements. Note that processing times for bank loans tend to run slow. Wells Fargo’s secured line of credit, for instance, can take up to two weeks to process and fund.
SBA lenders
The U.S. Small Business Administration offers SBA lines of credit with capped interest rates, including SBA Express lines of credit and four SBA CAPLine programs. While the SBA guarantees a portion of the debt, you must apply directly through an SBA-approved lender. Processing times can be significantly faster when you work with an SBA Preferred lender.
Online lenders
Alternative lenders utilize the latest underwriting software to provide quick business loans to a range of business types — from startups to well-established companies. Compared to traditional bank and SBA loans, online lenders typically have lower credit score and business history requirements. But be prepared to pay a higher price for non-bank financing.
How to get a secured business line of credit
Whether you are looking to start a business or are a well-established company, here are six steps to help you get small business financing.
1. Determine your funding needs
Create a detailed business budget to estimate what your business needs right now. Remember, business lines of credit act like a credit card, allowing you to withdraw funds on an as-needed basis. Unlike business term loans, you typically only pay interest on withdrawn amounts.
2. Evaluate your business qualifications
Each lender has its own set of business loan requirements, including minimum credit score, time in business, annual revenue and collateral requirements. You can monitor your credit scores for free with LendingTree Spring to see where you stand.
If your options seem limited due to poor credit, try improving your credit score or adding a creditworthy cosigner to increase your approval odds.
3. Assess your collateral
Collateral requirements vary by lender and loan type, but generally include fixed assets like equipment, invoices or real estate, or financial assets like cash, investments or certificates of deposit. If you’re not sure which type of collateral is best for your business, start by listing your assets and their values on a balance sheet.
Some lenders may specify which types of collateral they will or will not accept. If you are unable to meet the lender’s collateral requirements, try starting with an unsecured line of credit. Find a lender who reports on-time payments to the major credit bureaus, which can help build your credit profile over time.
4. Compare secured business lenders
Shopping around can help you find the best line of credit for your business needs. If a lender doesn’t disclose rates and eligibility criteria online, contact them to get more information. You can also read our list of small business lender reviews before applying to ensure a lender is a good fit for your company.
5. Gather required documents
Lenders require certain legal and financial documents when you apply for a secured line of credit. While the exact paperwork will vary, here’s a general idea of what you might need to provide:
- Business plan
- Business budget
- Personal and business tax returns
- Bank statements
- Cash flow statements
- Business licenses and permits
- Lease agreements, if applicable
- Certificate of good standing
- Information on available collateral (such as proof of ownership, liens and value)
6. Apply and review
You can complete most credit line applications online, but some traditional lenders might require an in-person appointment. Secured loans tend to take longer to process and fund than unsecured loans. This is because the lender needs to review and potentially appraise your business assets. With SBA loans, for example, it could take up to several months to receive your funds after approval unless you’re working with an SBA Preferred Lender or applying for an SBA Express loan.
Review your business loan agreement before signing on the dotted line to ensure you understand the rates, repayment term and additional fees.
How to compare secured business lines of credit
If you qualify for several credit line offers, picking the best option could be tough. Take a look at the following details to help narrow your options.
Interest rate
Business line of credit rates vary based on your credit profile and the type of lender, with traditional banks typically offering the most competitive rates. While variable rates might seem enticing in the moment, a fixed rate offers more stability over the long term.
Repayment term
Lines of credit could require daily, weekly or monthly payments. Some lenders, like Wells Fargo, require monthly interest-only payments. Crunch the numbers to ensure you can keep up with the repayment schedule.
Time to fund
Online lenders typically fund businesses within one to three business days after approval, with some lenders offering same-day business financing. However, these quick-turnaround loans typically have higher rates and less flexible terms. If you can wait up to two weeks or longer, you will likely receive a more competitive offer from a traditional bank.
Pros and cons of secured business lines of credit
Pros
-
More lenient qualifications
Collateral can reduce lender risk, helping strengthen your loan application. -
More favorable rates and terms
With the extra security, lenders are typically able to provide lower interest rates and longer repayment terms. -
Greater flexibility
A line of credit allows you to withdraw funds as needed, using the funds to cover a range of small business expenses.
Cons
-
Assets at risk
If you can’t pay your loan, the lender could seize the assets you pledged as collateral. -
Slower time to funding
Lenders typically need extra time to appraise your collateral, which can lengthen the funding timeline. -
Additional fees
Some lenders charge maintenance and draw fees, as well as annual origination fees.
Alternatives to secured business lines of credit
There are many advantages to secured business lines of credit, such as competitive rates and flexible terms. However, if your business is unable to provide adequate collateral, here are some other funding options to explore.
Unsecured business loans
Unsecured business loans provide a lump sum of cash without requiring any physical or financial assets as collateral. However, some business lenders might require a personal guarantee and/or business lien for an extra layer of protection.
You can also consider other types of business loans with lenient collateral requirements. For example, with equipment financing and commercial real estate loans, the asset you’re purchasing serves as collateral to secure the debt.
Small business grants
You can apply for a range of small business grants through local and federal government agencies as well as nonprofit organizations and private corporations. While researching and applying for grants can take time and effort, it can be worth it to receive free money for your company.
Business credit cards
Another option for covering everyday expenses is a business credit card. Eligibility requirements tend to be less stringent than traditional business financing, plus you could earn business travel rewards as you spend.
Note that interest rates typically run higher for credit cards than lines of credit, which can add up if you don’t pay off your balance in full every month. However, you can claim credit card interest as a qualified business tax deduction.
Crowdfunding
Crowdfunding tends to work best for businesses with a robust online presence, especially if you can offer a specific product or service as a reward for donating. Crowdfunding platforms may take a small fee from donations you receive, but don’t typically charge upfront for the service.
Frequently asked questions
Yes, securing a line of credit with collateral can improve your chances of approval and potentially get you a more competitive rate. Acceptable forms of collateral typically include fixed assets like equipment, inventory or real estate, as well as financial assets like cash and certificates of deposit.
Most lenders require a personal FICO Score of 600 or higher when applying for a business line of credit. Providing collateral could help strengthen your application, even if you have a less-than-ideal credit score.
Alternatively, you can consider business financing for bad credit, with some lenders accepting credit scores as low as 500. While these loans can help in a pinch, they typically come with high rates and less favorable terms.
Business owners might struggle to qualify for a business line of credit without steady revenue or acceptable collateral. However, here are some other ways to get funds for your startup business:
- Equipment financing: Since the equipment acts as collateral to secure the loan, lenders like are able to offer 100% equipment financing with no down payment or annual revenue required.
- Microloans: Startup businesses and entrepreneurs from underrepresented communities can consider microloans, which provide up to and typically have no or low annual revenue requirements.
- Personal loans for business:Personal loans and lines of credit are usually easier to qualify for than business loans, although you still need a good credit score and a favorable debt-to-income (DTI) ratio. Also, personal loans tend to provide smaller loan amounts with higher interest rates.
Our methodology
We reviewed more than 20 leading small business lenders to find the six best secured business lines of credit. To make our list, lenders had to meet the following criteria:
- Rates, terms and fees: We looked for lenders with competitive rates, limited fees and flexible repayment terms.
- Collateral requirements: We prioritized lenders that provide details on the types of collateral they accept.
- Repayment experience: We considered 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 business rewards programs.
- Qualification criteria: To include financing options for a variety of borrowers, we included lenders with a range of credit score, time in business and annual revenue requirements, focusing on the best lenders for different situations.