What are the advantages of Secured Term Loans?
Lower interest rates
Secured term loans often come with lower interest rates compared to unsecured loans. By providing collateral, such as property, inventory, or equipment, you reduce the lender’s risk. As a result, lenders are more willing to offer lower interest rates, which can save your business money over the loan term.
Higher loan amounts
Securing a loan with collateral allows you to access higher loan amounts. Lenders are more comfortable extending larger loans when they have assets to fall back on. This can be particularly beneficial if your business needs substantial funding for expansion, equipment purchase, or other major investments.
Longer repayment periods
Secured term loans often come with longer repayment periods compared to unsecured loans. This can be advantageous for businesses that require a longer time frame to repay the loan without putting excessive strain on their cash flow. The extended repayment period allows for smaller monthly instalments, making it easier to manage your finances.
Easier Approval for Lower Credit Scores
Securing a loan with collateral can make it easier to get approved, even if your business has lower credit scores. The collateral provides lenders with a sense of security, reducing their concerns about your creditworthiness. If you have struggled to obtain an unsecured loan due to credit issues, a secured term loan can be a viable alternative.