Glossary

Secured vs unsecured lending

Secured lending is backed by an asset the lender can claim; unsecured lending relies on the company's promise to repay. The trade-off is size and cost against what you put at risk.

2 min read

SecuredBacked by an asset

UnsecuredBacked by a promise

Definition

Secured lending is backed by collateral — property, equipment, invoices — that the lender can claim on default. Unsecured lending has no such asset behind it; the lender relies on the company's trading and covenant to repay.

In plain terms

Secured means something's on the line and usually unlocks more or cheaper borrowing. Unsecured keeps your assets clear but tends to be smaller and priced a little higher.

Why it matters for your company

Watch for a personal guarantee, which can reintroduce personal risk even on 'unsecured' company debt. Credicorp lends unsecured against your personal assets with no personal guarantee. See secured vs unsecured.