JoVE Logo

Sign In

10.13 : Secured Loans

Secured loans play an important role in supporting businesses by providing access to substantial funding while minimizing risks for lenders. These loans require the borrower to pledge assets as collateral, such as property, equipment, or inventory, which acts as security for the loan. This reduces the lender's risk, often resulting in lower interest rates than unsecured loans.

For businesses, secured loans are a reliable way to finance significant expenses or investments, such as purchasing machinery or expanding operations. The availability of such loans enables businesses to invest in growth opportunities without exhausting their working capital. Additionally, the repayment terms of secured loans are generally more flexible, making them suitable for long-term financial planning.

One significant advantage of secured loans is that businesses with limited credit histories can qualify for secured loans, as the collateral offers assurance to lenders. However, it is crucial for businesses to assess the risks involved, as failure to repay the loan may lead to the loss of the pledged asset.

In conclusion, secured loans are a cornerstone of business finance, offering businesses access to much-needed capital. However, they require careful financial management to ensure the business's growth and sustainability.

Tags

Secured LoansBusiness FinancingCollateralLower Interest RatesFlexible Repayment TermsCredit HistoriesAsset PledgeRisk ManagementCapital AccessFinancial PlanningInvestment OpportunitiesBusiness Growth

From Chapter 10:

article

Now Playing

10.13 : Secured Loans

Short-term Financing and Planning

43 Views

article

10.1 : Introduction to Short-term Finance

Short-term Financing and Planning

78 Views

article

10.2 : Operating Cycle

Short-term Financing and Planning

111 Views

article

10.3 : Cash Conversion Cycle

Short-term Financing and Planning

39 Views

article

10.4 : Cash Budget I

Short-term Financing and Planning

72 Views

article

10.5 : Cash Budget II

Short-term Financing and Planning

39 Views

article

10.6 : Management of Marketable Securities

Short-term Financing and Planning

55 Views

article

10.7 : Management of Accounts Receivable

Short-term Financing and Planning

44 Views

article

10.8 : Credit Terms and Collection Efforts

Short-term Financing and Planning

52 Views

article

10.9 : Inventory Management

Short-term Financing and Planning

111 Views

article

10.10 : Trade Credit from Suppliers

Short-term Financing and Planning

33 Views

article

10.11 : Unsecured Loans

Short-term Financing and Planning

33 Views

article

10.12 : Line of Credit

Short-term Financing and Planning

33 Views

article

10.14 : Accounts Receivable Financing

Short-term Financing and Planning

42 Views

article

10.15 : Inventory Loans

Short-term Financing and Planning

31 Views

See More

JoVE Logo

Privacy

Terms of Use

Policies

Research

Education

ABOUT JoVE

Copyright © 2025 MyJoVE Corporation. All rights reserved