What is an unsecured loan?

A loan without the need of security such as a property is considered unsecured. This means there
are no caveat, or a charge listed on the personal property register (PPSR) against your property for
the loan.

This is a great advantage as it would not hinder your opportunity to get a loan with major banks.

“Often we have clients referred to us by brokers who need unsecured funding quickly to seize an
opportunity without jeopardising their current loan application with their bank” – Yuan Chong, Sqale
Finance

There are multiple benefits to an unsecured loan.

1. It gives the business owner the comfort of not placing the family home at the risk of the
   business.
2. It does not affect your ability to obtain a loan with the major banks.
3. It mitigates any internal issues between business partners, Directors and Shareholders based
   on security contribution.
4. It gives you quick access to finance needed to cashflow an opportunity and/or growth.

“We delivered a loan for a celebrity restaurant in NSW where there were 3 directors. They opted for
unsecured finance so they can mitigate any future issues within them if they had taken a secured
bank loan. They believe issues could arise particularly when some directors had higher valued assets
at risk to be considered for a bank loan” – Yuan Chong, Sqale Finance

Ultimately, the usage of the term “unsecured loans” essentially means there has been no property
formally been taken as security and major lenders can still review your business for a secured loan.