Whether you are just starting your business, or it is reaching out to new customers and markets, you’ll likely need the occasional infusion of working capital. The most common forms are loans or lines of credit from a financial institution. Broadly speaking, loans and credit lines can be divided into those that are ‘Secured” and those that are “Unsecured”.

Secured Credit for Business Growth

When any form of financing is secured, it is obtained against an asset that belongs to the borrower. This asset becomes collateral, which the lender can liquidate if you do not pay the financing back. The asset that secures the financing can take several forms: real property, cash, or securities are common types.

Secured credit is quite common. It is the typical type if you are a new entity in the business world and do not have a history of paying normal business-related debts in a timely fashion because you are just starting.

Unsecured Credit for Business Growth

If your business has a good reputation for paying its debts on time and in full, i.e. good credit history, the chances are much greater that it will be able to obtain an unsecured line of credit. Even if you are launching a startup, you may be granted secured financing for business growth if your personal credit history is good.

The major benefit of obtaining unsecured credit is that you do not need to put up any collateral whatsoever. On the negative side, unsecured credit can have higher interest rates than secured credit. That’s because lenders often view unsecured loans as riskier than secured forms of credit

Partner with WCK Financial

As your business grows and evolves, it may need an infusion of credit. Give WCK Financial a call. Working in tandem, you will find a solution that fits your business’s needs perfectly.