Secured business loans require the borrower to provide collateral or any form of acceptable security against the amount being borrowed. Depending on the lender's criteria. The borrower can use his or her home, car, equipment, inventory, cash savings and/or accounts receivable to guarantee that the loan will be repaid.

Secured loans pose less risk to the lender since they have something that can be called upon when the borrower defaults on his repayment. As such, this type of loan offers higher loan amounts, lower interest rates, faster approval rates and longer repayment terms.