Compare finance types
Secured loan vs Trade finance: which is right for your business?
The main difference between a secured business loan and a trade finance is how they are secured and repaid: a secured business loan suits businesses with property or unencumbered assets borrowing larger amounts over longer terms, while a trade finance suits importers, wholesalers and distributors with proven sales and reliable suppliers.
Secured loan vs Trade finance at a glance
| Secured business loan | Trade finance | |
|---|---|---|
| What it is | A secured business loan is a lump-sum business loan backed by an asset you pledge — usually residential or commercial property, but sometimes equipment or a general security agreement over the business. Security lowers the lender’s risk, so rates are lower and terms longer than unsecured lending. | Trade finance is a revolving facility that pays your suppliers for goods at the time of order and gives your business 60–180 days to repay, bridging the gap between paying for stock and being paid for it. It covers both imported and domestic purchases. |
| Amount | $50,000 – $5,000,000 | $50,000 – $5,000,000 |
| Term | 12–180 months | 2–6 months |
| Indicative rate | 6.8% – 13.5% p.a. | 9% – 20% p.a. |
| Rate type | Fixed or variable | Variable |
| Security | Secured by property | Secured by receivables |
| Repayments | Monthly, principal and interest or interest-only for a set period | Each drawdown repaid in full at the end of its term |
| Typical speed | 2–6 weeks including valuation | 1–3 weeks to establish, then 24–48 hours per drawdown |
| Best for | Businesses with property or unencumbered assets borrowing larger amounts over longer terms | Importers, wholesalers and distributors with proven sales and reliable suppliers |
| Consider the other if | Urgent funding needed this week, or amounts too small to justify valuation costs | Service businesses with no stock, or one-off purchases that do not justify a facility |
| Tax | Interest on business-purpose borrowing is generally deductible. Establishment and valuation costs may be deductible over time. Confirm with your accountant. | Interest and facility fees on trade borrowing are generally deductible. Confirm with your accountant. |
Rates shown are indicative ranges observed across our lender panel for the period stated. They are not an offer or quote. Your rate depends on your business, the lender, the amount, the term and the security offered. The lender makes the final credit decision.
When to choose a secured business loan
A secured business loan is usually the better fit for businesses with property or unencumbered assets borrowing larger amounts over longer terms. Its main advantages are materially lower rates than unsecured lending, larger amounts and terms up to 15 years, interest-only periods available on many facilities. Consider the alternative if urgent funding needed this week, or amounts too small to justify valuation costs.
When to choose a trade finance
A trade finance is usually the better fit for importers, wholesalers and distributors with proven sales and reliable suppliers. Its main advantages are pay suppliers upfront and often negotiate better pricing, revolving limit recycles with each repayment, works alongside invoice finance to cover the full cycle. Consider the alternative if service businesses with no stock, or one-off purchases that do not justify a facility.
Secured business loan
A secured business loan is a lump-sum business loan backed by an asset you pledge — usually residential or commercial property, but sometimes equipment or a general security agreement over the business. Security lowers the lender’s risk, so rates are lower and terms longer than unsecured lending.
Trade finance
Trade finance is a revolving facility that pays your suppliers for goods at the time of order and gives your business 60–180 days to repay, bridging the gap between paying for stock and being paid for it. It covers both imported and domestic purchases.