Secured Business Line of Credit
Secured business lines of credit use your business assets — real estate, equipment, accounts receivable, or inventory — as collateral. Result: significantly lower rates, higher credit limits, and the most cost-effective revolving financing available for established businesses.
About Secured LOC Loans
Secured business lines of credit are revolving credit facilities backed by specific business collateral — real estate, equipment, accounts receivable, or inventory. By pledging collateral, you unlock significantly lower rates (often Prime + 1–4%) and higher credit limits than unsecured alternatives. You draw as needed up to your approved limit, pay interest only on the outstanding balance, and the line replenishes as you pay down. Ideal for established businesses with valuable assets and ongoing working capital needs.
Key Features & Benefits
Everything you need to know about what makes Secured LOC financing a smart choice.
Lower Rates
Collateral lowers lender risk, resulting in rates 3–8% lower than unsecured lines of credit.
Higher Credit Limits
Lines up to $1M+ available vs. typical $250K cap on unsecured lines.
Pay Interest Only on What You Use
Unlike term loans, you only pay interest on outstanding balance — huge savings vs. taking an equivalent term loan.
Revolving Credit
As you pay down principal, the line replenishes — available again for future draws.
Multi-Year Draw Period
1–5 year draw periods with renewal options for long-term credit access.
Multiple Collateral Options
Secure with commercial real estate, equipment, A/R, inventory, or blanket lien on business assets.
Who Uses Secured LOC Financing
- Ongoing working capital for established businesses
- Seasonal inventory builds with predictable payback
- Bridging A/R collections and payroll
- Opportunistic purchases at supplier discounts
- Marketing campaigns with measurable ROI
- Equipment maintenance and minor capex
- Emergency reserve for unexpected expenses
- Funding new location openings before revenue ramps
Qualifications & Eligibility
- Business in operation 2+ years
- Annual revenue of $500,000+ preferred
- Credit score 680+ for best pricing
- Collateral with value of at least 1.25x credit limit
- Clean business and personal credit
- Two years of tax returns and financial statements
- DSCR of 1.25x+ including new line payment
How It Works
Our streamlined process gets you from application to funding quickly.
Collateral Review
We evaluate your available collateral and identify the best structure (specific asset vs. blanket lien).
Application
Submit business financials, tax returns, collateral information, and personal guarantor details.
Underwriting & Appraisal
Collateral appraisal (if real estate or equipment) and full credit underwriting — 2–4 weeks.
Approval & Commitment
Formal credit commitment with credit limit, rate, term, and collateral requirements.
Closing & Draw
Sign loan documents, collateral is perfected, and line is immediately available for draws.
Why Choose Growth Fund Partners for Secured LOC
Frequently Asked Questions
Common questions about Secured LOC loans answered.
What collateral is accepted?
Most commonly: commercial real estate, equipment, accounts receivable, and inventory. Some banks accept blanket UCC-1 liens on all business assets. Real estate typically enables the highest LTV and lowest rates.
How is interest calculated?
Interest accrues daily on the outstanding balance at your variable rate (typically Prime + a margin). You pay interest monthly on what you\u2019ve drawn, not on the unused portion of your line.
What\u2019s the difference between secured LOC and asset-based lending?
Secured LOC: Fixed credit limit based on underwriting. Asset-based lending (ABL): Borrowing base calculated monthly as a percentage of eligible A/R and inventory — limit fluctuates with asset value. ABL offers higher leverage but requires monthly reporting.
Can I convert my line to a term loan?
Yes — many programs allow conversion of outstanding balance to a term loan at the end of the draw period, essentially amortizing the balance over a fixed repayment period.
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