A secured business loan requires the borrower to pledge an asset (property, equipment, or stock) as collateral. If the business defaults on repayments, the lender has the legal right to seize and sell the collateral. Secured loans typically offer lower interest rates and higher loan amounts in exchange for this security.

An unsecured business loan does not require specific collateral. Approval is based on the business's cash flow, revenue history, credit score, and trading record. Lenders charge a higher interest rate to compensate for the increased risk. Fintech lenders like Lulalend and Merchant Capital specialise in unsecured SME finance.

Yes — providing quality collateral can compensate for a lower credit score in secured lending. Asset-based lenders focus more on the value and quality of the collateral than the borrower's credit history. Invoice finance and asset finance are commonly available to businesses with challenged credit profiles.

Unsecured loans are significantly faster. Fintech unsecured lenders can approve and disburse within 24–48 hours. Secured loans require asset valuation, legal documentation, and registration — typically 2–8 weeks for commercial property-backed facilities.