Secured Business Loans would are the ones that are backed up by property or personal assets. The security allows the borrower to get needed capital for a better rate than unsecured business loans.
Unsecured Loans are based solely on the good name of the borrower or the soundness of the business.
Credit cards can be business loans or the individual companies may offer business loans. Credit cards are revolving credit, but may be good for companies that collect money at a certain time each month and therefore doesn't have much working capital the rest of the month.
Some banks offer business loans based on existing inventory. These loans are usually in the form of a line of credit that works similar to a credit card. There is a set loan limit, but as the balance gets paid down, the money becomes available again. These business loans are usually on a variable rate.
A little creativity could help avoid the need of business loans. Using factoring instead of business loans can give a company a strong monetary boost that is fast and cost effective. It is the practice of selling outstanding invoices to a third party at a discount. The third party is then responsible for collecting on the invoices.
There are many forms of business loans, and many variables within each type of loan. Secured Business Loans offer the best rates while unsecured loans can be the fastest method of finding capital. Creative thinking, like factoring, can help companies avoid the need for business loans altogether.
Before choosing a business loan, take some time to look over the multiple choices and consult a financial expert about the best route for your company.