In today's competitive business landscape, securing the necessary funds to fuel growth and expansion is
crucial for success. One viable financing option that provides stability and flexibility
is secured business finance. By leveraging assets and collateral, businesses can access the capital they need
while minimizing risk. In this article, we will explore the benefits and considerations of secured business
finance and how it can empower businesses to achieve their growth objectives.
Understanding Secured Business Finance
Definition
Secured business finance refers to a financing arrangement in which a business pledges collateral,
such as real estate, equipment, or inventory, to secure a loan or line of credit
The role of collateral
Collateral acts as a form of security for the lender, reducing their risk and providing assurance of
loan repayment
Types of collateral
Common types of collateral include property, inventory, accounts receivable, and equipment. The
choice of collateral depends on the nature of the business and the lender's requirements.
Tailored financing for your business goals. Trust our expertise for seamless business loan assistance.
Access to higher loan amounts: By offering collateral,
businesses can typically secure larger loan amounts compared to unsecured financing options
Lower interest rates: Secured business finance often comes
with lower interest rates due to the reduced risk for lenders.
Longer repayment terms: Lenders may offer more extended
repayment periods, providing businesses with increased flexibility in managing their cash flow
Easier approval process: Securing a loan with collateral can
simplify the approval process since lenders have tangible assets to mitigate their risk.
Choosing the Right Lender
Research and compare lenders
Evaluate multiple lenders to find the best fit for your business, considering factors such as interest rates, repayment terms, and flexibility.
Seek professional advice
Consulting with financial advisors or industry experts can help you navigate the selection process and make informed decisions.
Secured business finance offers a viable solution for businesses seeking capital to support their growth objectives. By understanding the benefits, considerations, and available options, businesses can make strategic financing choices that propel them toward
success. Whether it's funding expansion plans,
investing in new equipment, or optimizing cash flow, secured business finance can be a valuable tool in achieving sustainable growth
Common Types of Secured Business Finance
Fuel your business growth. Apply for a business loan!
Evaluate multiple lenders to find the best fit for your business, considering factors such as
interest rates, repayment terms, and flexibility.
Seek professional advice
Consulting with financial advisors or industry experts can help you navigate the selection process
and make informed decisions.
Secured business finance offers a viable solution for businesses seeking capital to support their growth
objectives. By understanding the benefits, considerations, and available options, businesses can make
strategic financing choices that propel them towards success. Whether it's funding expansion plans,
investing in new equipment, or optimizing cash flow, secured business finance can be a valuable tool in
achieving sustainable growth
We at Dealplexus, have the capability to execute difficult and complex debt and equity transactions of
financially distressed entities from investors, special situation funds and NBFCs etc.
Our deep domain knowledge and research driven approach enriched with experience enables us to make a
result-oriented representation to prospective investors.
We offer support in raising the following different types of debt for business
Project Finance
Project finance is that the long-term financing of commercial manufacturing or any other such projects
based upon the projected cash flows of the project instead of the balance sheets of its sponsors
Working Capital Finance
A working capital loan is a loan that's taken to finance a company's everyday operations. These finance to
buy long-term assets or investments and are, instead, provide the finances that cover a company's short-term
operational needs
Equipment Loans
Equipment financing is that the use of a loan or lease to get or borrow hard assets for your business. This
sort of financing could be used to purchase or borrow any sort of equipment.
Structured Financing
It is a complex form of financing, used for a large-scale fund infusion. It is beyond the scope of
conventional tools like a loan or a bond. Borrowers with higher needs seek structured funding in the form of
Collateralized Debt-obligations, Syndicated loans, and Mortgage-Backed Securities
Acquisition Funding
Acquisition financing is that the funding a corporation uses specifically to acquire another company. By
acquiring another company, a company can increase the dimensions of its operations and enjoy the economies
of scale achieved through the acquisition.
Promoter Funding
A facility provided to promoters of well-managed companies to boost funds against their stake therein
operating company. These funds are often utilized for various needs like financing for Acquisitions and
take-over financing and business growth. These funding are short to medium-term in nature
Mezzanine Funding
In finance, mezzanine capital is any subordinated debt or preferred equity instrument that represents a
claim on a company's assets which is senior only thereto of the common stock. It is often structured either
as debt or preferred shares or another form of quasi-equity
Overseas Funding
Overseas funding refers to a fund that invests in companies outside the country of residence of the
investor. These are often also called as international funds or foreign funds. Overseas funding is often
through closed-end funds, exchange-traded funds or mutual funds.
Distressed Assets Funding, Interim Finance, One Time Settlement (OTS) Etc
These types of funds are typically temporary or very short term loans provided to tide over a temporary or
interim funding shortfall as per requirement and repayment capacity of the borrower.
A secured business loan is a type of loan that requires collateral or specific assets to be pledged as
security. The collateral serves as a form of protection for the lender in case the borrower defaults on the
loan
Unlike an unsecured loan that does not require collateral, a secured business loan requires the borrower to
pledge specific assets as security. If the borrower defaults on the loan, the lender has the right to seize
and sell the collateral to recover the outstanding debt
Various assets can be used as collateral for a secured business loan, including real estate properties,
equipment, inventory, accounts receivable, or even personal assets of the business owner. The specific
assets accepted as collateral may vary depending on the lender's policies.
The collateral valuation process involves assessing the value of the assets being used as collateral. This
is typically done by an appraiser or valuer, who possesses the requisite skill and professional expertise to
value the specific asset. The value of the collateral helps determine the loan amount and the maximum
borrowing limit.
Secured business loans often come with lower interest rates compared to unsecured loans. They provide
greater security for the lender, which can result in higher borrowing amounts and longer repayment terms for
the borrower.
The approval timeline for a secured business loan can vary depending on the lender and the complexity of
the loan application. It may involve a thorough evaluation of the collateral and the borrower's financials.
The timeline can range from a few weeks to a couple of months.
Yes, existing assets in your business can often be used as collateral for a secured business loan. This can
include equipment, inventory, accounts receivable, or real estate owned by the business. The specific assets
that can be used as collateral may vary depending on the lender's requirements
If you default on a secured business loan, the lender has the right to seize and sell the collateral to
recover the outstanding debt. It's important to understand the terms and conditions of the loan agreement
and avoid defaulting on the loan
Dealplexus has partnered with numerous banks, NBFCs, Fintechs and Funds who provide a wide variety of
business loans to suit the increasing and multiple needs of the businesses. New and innovative solutions
have been designed to cater to every type of funding need of all businesses, big or small, trading,
manufacturing or service provider. Do write to us at support@dealplexus.com to know how we can help you in securing
the best financing solution for your business
}})
}})
}})