There are two general categories of business loans - secured and unsecured. In the case of secured business loans, a small business borrower will post a specific piece of collateral in the form of a valuable asset - including real estate, inventory, or manufacturing equipment - that a lender can potentially seize (and sell) in the event of non-repayment. With unsecured business loans, borrowers do not put up collateral, but in order to mitigate the risk associated with them, lenders attach higher interest rates to unsecured business loans.