One of the first distinctions to grasp when comparing business finance is whether a facility is secured or unsecured. The label changes what is at stake and how a lender views your application.
Secured lending
A secured facility is backed by a specific asset, such as commercial property, plant or equipment. If the company cannot repay, the lender can look to that asset. Security can support larger amounts or longer terms, but it ties a named asset to the borrowing and the paperwork is usually heavier.
Unsecured lending
An unsecured facility is not tied to a particular asset. The lender relies on the trading position and history of the company rather than a charge over property. Decisions are often quicker, but the assessment of the business itself tends to be the deciding factor.
Where Credicorp sits
Credicorp lends to the company, not to its directors. We do not take personal guarantees from directors as a condition of borrowing. That means the directors' personal assets are not pledged against a Credicorp Flex or Credicorp Slice facility. The terms specific to your offer, including any security, are set out in your agreement.
Comparing the two
- Secured can unlock more, but commits a named asset.
- Unsecured is typically faster to arrange.
- Always check what, if anything, is being pledged before you sign.
See also: Direct lender vs broker: which should you use?, Regulated vs exempt business lending: what it means for you and Secured vs unsecured business loans: what's the difference?.