Amounts: R150k to R5m
Speed of Funding: Medium to slow
Terms: up to 30 years
Interest Rates: Lower than unsecured
What is a Secured Term Loan?
A secured term loan is a loan granted to the business where the borrower then pledges some form of security or collateral against the loan. This means that your business cash flow and profitability is not as important as the underlying security offered to the lender. Because there is security, the risk is lower than an unsecured loan and so the interest rates charged by the lender are normally lower than an unsecured loan. Secured loans are normally short term loans ranging from 3 months to 3 years.
- Defined payment structure
- Less expensive than unsecured
- Lower monthly payment
- Longer term
- Require security