Unsecured Lending

In contrast to secured loans, an unsecured loan relies on the borrower’s personal promise, or covenant, to repay. Unsecured loans are higher risk than secured lending. They have higher interest rates and are available only for shorter terms. For example, while a mortgage secured on a property will be available for 25 years or even longer, we offer an unsecured loan over much over six or seven years.

CASE STUDIES

Unsecured Line of Credit for business expansion.

Business details

A well-established business was formed ten years ago. The company supplied hardware for installing telecommunications into buildings across Australia.

What did the client want?

The clients were seeking finance to buy quantities of discounted stock. In addition, the business needed 1m line of credit (LOC) secured against their assets.

Difficulties along the way

We approached their existing lender; But they declined because of standard lending policies for businesses. So we needed a lender with a flexible approach.

What did we do?

We work with lenders that specialise in suitable funding businesses for growth – and after discussing the client needs, we negotiated terms.

Key points

In contrast to secured loans, an unsecured loan relies on a director’s guarantee or covenant over the business assets. Unsecured loans are higher risk than secured lending, with the consequence that they attract higher rates of interest.