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Secured vs Unsecured Business Loans in Canada

Reviewed by Fund That · Commercial financing education · Updated September 29, 2026

Business loans can be secured by specific assets or offered without a specific pledged asset, depending on the lender and transaction. The difference can affect underwriting, available amounts, pricing, documentation and risk.

What is a secured business loan?

A secured business loan is supported by collateral or other security. Depending on the transaction, security may include equipment, real estate, receivables, inventory or other business assets.

What is an unsecured business loan?

An unsecured business loan does not rely on a specific pledged asset in the same way, although lenders may still require guarantees, general security agreements or other protections depending on the provider and jurisdiction.

How can the structures differ?

SecuritySecured financing is supported by identified collateral; unsecured financing relies more heavily on business and guarantor creditworthiness and cash flow.

AmountsCollateral can sometimes support larger financing requests, subject to lender criteria and asset value.

UnderwritingSecured transactions may require valuations, lien searches or asset documentation.

CostPricing depends on the full risk profile and provider, not simply whether a facility is secured.

For a defined capital need, review business loans. For financing tied directly to productive assets, see equipment financing.