types of loans /

Secured Small Business Loans

A secured loan, also known as a collateralized loan, is best suited for entrepreneurs and small business owners who are capable of supplying collateral to back their loan. If the borrower does not pay back the loan, the lender can claim the asset or collateral. The collateral not only makes the borrower more invested in their financing, but it puts the lender more at ease.

There are a few types of secured loans, including equipment loans, factoring and merchant cash advances, that have their own unique attributes. Prior to deciding which secured small business loan is the best fit for you, consider the information below on each loan type.

Equipment Loan Financing | Get Funded with Kabbage

Equipment loans come in handy when you're looking to purchase, upgrade, improve upon or replace the equipment you use for your small business to keep your business operating smoothly and efficiently. The collateral you pledge to get an equipment loan is usually the new piece of equipment you are buying. It is very similar to getting a car loan.

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Is A Merchant Cash Advance For You? | Kabbage INC

Merchant cash advances, or business cash advances, provide upfront working capital, allowing your business to make important investments quickly. Merchant cash advance companies typically partner with card processing companies because merchant cash advances require your business to exchange a percentage of future credit card sales. This type of small business funding is ideal if you prefer paying back your advance when your business makes sales instead of paying on a set schedule. However, the downside is the merchant cash advances typically have higher fees than other types of small business loans.

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Business Factoring Loans | Get Funded with Kabbage

Factoring is a unique way to access small business funds, as it enables you to obtain working capital by selling your receivables. Factoring is the sale of an asset, not a business loan, and is helpful when businesses face long receivables. This form of small business financing is appealing to entrepreneurs and small business owners who don't want to wait for their customers' payments.

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How SBA Loans Work | Get Funded with Kabbage

SBA loans are formed as part of a relationship between the Small Business Administration (SBA) and commercial lenders. There are several types of SBA loans, such as 7(a) loans and export-assistance loans, which are geared towards certain situations that entrepreneurs and small business owners typically face. SBA loans often require collateral, but the SBA will not turn down borrowers for insufficient collateral alone.

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The advantage of a secured loan is that they can have lower fees, but the downside is that your asset can be repossessed, and it may take longer to be approved since there is more information for the underwriter to consider.