2 min read
Definition
Secured borrowing is backed by a specific asset — property, equipment or a debenture over the company — that the lender can claim if the debt is not repaid. Unsecured borrowing has no such backing; the lender relies on the company's affordability and creditworthiness. Because security lowers the lender's risk, secured borrowing typically carries a lower rate but a slower set-up and a real asset at stake. Unsecured is faster and pledges nothing, at a higher rate.
See our full comparison in secured vs unsecured: which costs less, and note that even unsecured company loans may carry a personal guarantee unless the lender waives it.
Related reading
Secured vs unsecured: which really costs less
Secured borrowing shows a lower rate but puts an asset on the line; unsecured costs more on paper but risks…
Read →
Business loans with no personal guarantee
A no-personal-guarantee loan lets a limited company borrow without a director signing away their own assets…
Read →Why secured finance is cheaper than unsecured
Secured finance almost always prices lower than unsecured because collateral cuts the lender's loss if things…
Read →Unsecured business loans explained
An unsecured business loan is lent against your company's trading strength, not against an asset. No charge…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.