Understanding secured and unsecured finance options

Sometimes you need to get your hands on some extra cash for your small business. Perhaps you need a quick and easy business loan to purchase new equipment, expand your premises or take on new staff. Whatever the reason, it can be hard to understand your small business finance options.

Let’s now take a detailed look at secured and unsecured business loans.

Secured or unsecured?

All short term small business loans fit into one of two categories. Business finance is either

  • unsecured, or
  • secured

But what does this mean?

Secured small business finance

  • Put simply, a secured loan requires you to provide some sort of security.
  • This security can be anything that the lender considers to be relevant and of considerable value.
  • Your security item can include anything from residential or commercial real estate properties to vehicles including cars, boats or other machinery. You can even provide your company itself as security.
  • Providing an item as security is for the lender’s benefit. It provides them with the assurance of knowing that if you default on repaying the loan, they can make a claim on the item you have provided as security.
  • This enables the lender to claim and sell your security item in order to recover the loan amount if you don’t repay it.

Big banks love security

  • Secured loans are the most common type of small business finance, and the only type of finance that the bank and large finance institutions will often consider offering.

What if you don’t have assets?

  • For many small business owners, their business is their sole asset.
  • As a small business owner you pour your heart, soul and all of your cash into building and growing your business.
  • You might not have a fancy house or car to provide as security for a loan. This is where unsecured small business finance comes in.

Unsecured small business finance

  • As the name suggests, an unsecured small business loan is not secured. You don’t need to provide any type of asset or security against the finance.
  • The lender instead assesses the ability of your small business to repay the loan.
  • This form of finance involves more risk for the lender – which explains why most of the big banks and financial institutions won’t offer unsecured finance. They’re unwilling to take a chance on many small businesses.

Quick and easy finance for your small business

  • An unsecured short term small business loan is perfect if you don’t have suitable assets to provide as security.
  • If your small business needs fast, easy access to extra cash for expenses or to help you build and grow, an unsecured loan can provide the cash injection you need.

Need a quick cash injection for your small business – minus the hassle?

  • For information on how your small business can access fast, flexible finance talk to us at Limba.
  • We understand small business first-hand and know the challenges you can face. If you haven’t been trading for long or need a cash injection quickly, getting support from the big banks can be tough.
  • Unlike the big banks, we want to make like easier for small business, with easy access to additional cash flow. We offer unsecured business loans up to $10,000.

Let us help your small business build and grow

  • Limba can offer your small business:
    • a streamlined application process
    • a Business Specialist to assess your needs and guide you through the application process
    • fast approval and same day funding
    • no hidden fees
    • easy weekly, fortnightly or monthly direct debit repayments

Applying is easy!

The application form only takes approximately five minutes to complete.

  • Our friendly Business Specialists will call and assess your needs, advise you of the outcome of your application and recommend a suitable repayment schedule.
  • Funds can then be in your account on the same business day!
  • Call 1300 10 10 77, or email us at business@limbaloans.com.au.
  • You can also apply online today