Business Loans
Business Loans
Business loans are generally taken out for one of two reasons: to finance the purchase of an asset, such as a vehicle or equipment, or to assist with your business’ working capital. Business loans are generally either secured or unsecured.
Business loans function similar to other loan products. If approved, your lender will provide finance to assist with your business’ working capital or the purchasing of an asset, and you’ll be charged either a fixed or variable interest rate over the loan term.
What are some different types of business loan products?
Unsecured business loan
With an unsecured loan, you’re able to secure financing for your business without using an asset as collateral. Because you’re not borrowing against an asset, the lender will typically assess your business’ cash flows, trading history, and creditworthiness as part of your application.
Secured business loan
Secured business loans are generally provided for a fixed period of time, and require a physical asset to be served as collateral for the loan. Examples of a secured asset include residential and commercial property, vehicles, and equipment.
Equipment loans
Also referred to as “asset finance”, equipment loans are commonly used by businesses to purchase things like machinery, vehicles, and other technology. There are various loan arrangements available for this kind of financing, including a chattel mortgage, a hire-purchase agreement, and a lease agreement.