Tuesday, 8th March 2022 | Small business financing Canada
What assets can I use to get a secured business loan?
You can use a variety of assets to secure a small business loan in Canada. Read our blog to understand what assets work best and how iCapital can help assist your business to grow further!
Historically, collateral has been viewed as a crucial factor in obtaining a small business loan. "A valuable asset used to secure a loan" is what the term collateral means. Traditional lenders, such as banks, often seek safe assets as collateral, such as real estate or equipment. Should you default, anything of value that the lender can readily sell to fulfill your obligation may be accepted depending on the lender.
What assets can I use to get a secured business loan?
The following are the assets you can use to get a secured loan for a small business from iCapital.
Real estate
Given that real estate value frequently stays the same or grows over time, most lenders will accept the commercial and personal property as collateral.
Equipment
Equipment loans are secured by the equipment you're purchasing. Many lenders also take equipment as security for loans that are unrelated to it.
Inventory
The merchandise you're purchasing may be used as collateral for the loan. However, before accepting your inventory as security, your lender may need an audit by an auditor.
Account receivables
Account receivables are a standard option if your company's cash flow is caught up in client bills. This sort of collateral is popular among lenders since it is simple to convert into cash.
Cash
Your business's savings account serves as collateral for a cash-secured loan. Due to the highly liquid nature of cash as collateral, your company is put in a lower-risk category. Because of the minimal risk, you may be able to get a reduced interest rate on your loan.
Personal belongings
If you're a startup with few assets, your house, vehicle, or investments might help you receive a loan. But be cautious: if you default, you risk losing your business and valued possessions.
Banks will evaluate the loan-to-value ratio of your collateral depending on the type of asset once your suggested collateral has been accepted. Individual lenders look at the loan-to-value ratio in different ways, so you'll have to ask your lender how they plan to calculate it. It's also a good idea to have the items you're using as collateral adequately assessed, so you know how much your lender will give you.
Why take a secured business loan?
A secured loan for a small business is beneficial to the lender, but it can also be helpful to borrowers. Owners with a bad credit score who want to start over, for example, will find it easier to obtain a secured business loan. In addition, low annual percentage rates, longer payback terms, and the ability to connect with the lender are all advantages that might be useful in the immediate or long term.
Secured business loan with total flexibility and better rates
A secured loan for a small business is a good alternative if you need money to meet your expenses. A secured loan is not the same as a mortgage. Instead, it's a loan that's backed by the property you own. Secured loans from iCaptal start at 9.99 percent interest and offer longer terms than a second mortgage or another sort of loan.
With an iCapital secured loan, you receive the money you need and the freedom to utilize it any way you choose. It is the most effective way to free up your cash flow, which is the lifeblood of your company.
Why go with iCapital?
The advantages of taking out a small business secured loan from a company like iCapital are plenty. Not only can you borrow bigger sums of money with ease but you may also do it with a poor credit history. A secured loan for a small business is, without a doubt, the most effective way to give your business the boost it needs. Get small business loan offers customized for you today by contacting iCapital at 1.877.251.7171. Appy for a secured loan in 3 simple steps: request quote, approvals in 24 hours, automated repayments.
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