Secured Loans 

A Secured Loan is a type of loan backed by collateral — a valuable asset such as real estate, equipment, accounts receivable, or inventory. If the borrower defaults on repayment, the lender has the legal right to seize the collateral to recover its losses. 

Secured loans generally offer lower interest rates and higher borrowing limits than unsecured loans because they reduce the lender’s risk. Common examples include: 

• Mortgage loans (secured by real estate). 

• Auto loans (secured by the vehicle). 

• Business loans secured by inventory or receivables. 

In the startup world, venture debt is often secured by the company’s assets, intellectual property, or stock.