Deciding whether to get a secured or unsecured small business loan depends on your current business needs and financial situation, as well as the type of funder you’re working with. A secured business loan is when the lender takes an interest in the business’s collateral, which typically means that the lender will file a UCC financing statement. A UCC financing statement is filed with the Secretary of State by the lender which allows for a lien to be placed on your business collateral to secure the loan. The UCC is filed in a state where your business operates or a state where the business has collateral. Once the small business loan has been paid in full, and there are no other outstanding loans with the lender, the lender will terminate the UCC. For an unsecured business loan, the lender doesn’t take an interest in the collateral and doesn’t file a UCC financing statement. In general, an unsecured loan increases possible risks for the lender. However, oftentimes an unsecured loan won’t offer as competitive of terms. Secured loans are typically a better option for many businesses as it helps reduce the cost of funds which can also help increase the amount of financing. It’s also important to consider that specific collateral (real estate, inventory, or other specific assets) can help increase financing even more. At Rapid Finance, our secured loans are a great option for small business financing as the application process is quick and easy.