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What is a secured commercial loan?
When you want a corporate loan centered on asset belonging to your organization, a secured corporate loan could be exactly what you are looking for. Collateralised corporate credits are appropriate for companies that own asset items such as real estate, automobiles and machines, or for CEOs who do not wish to provide a face-to-face guaranty.
There is a broad variety of creditors who offer secured commercial lending and the amount you can lend is dependent on the value of the property you have at your disposal. Which is a secured corporate loan? It is an asset-backed loan - precious property held by the company. That means that if your company cannot pay back, the creditor has the right to resell the property to get his cash back.
Conversely, uncollateralized corporate exposures are not asset backed, which means that the creditor will have to deal with various different credit metrics. To learn more about both methods, learn more about secured vs. uncollateralised credit. When your company is not a qualifying borrower for an uncollateralized loan, but has asset such as a vehicle, machine, equipment or industrial real estate, you may be able to use these as collateral for a secured loan.
Corporate secured credit is often described as a way of "releasing cash" - using available assets in your company as collateral. This means that you can take out a secured commercial loan basing on the value of something that belongs to your company. Since financing is secured against a tangible property, the creditor has the added assurance that if things go badly and you can't keep up with repayment, they can take the property to make up for their loss.
These reduced risks give the creditor more trust in your company's ability to lend, and often mean they don't need a face-to-face warranty or deep insight into your loan histories. Your assets could be a multitude of things: industrial real estate such as a store, yellows of machines, cars and much more.
Lenders need to know how they want to use it and what it's worth but overall the width of the acceptable collateral means that a secured commercial loan is open to a variety of companies in many industries.