(800) 949-0401 Apply NowA secured business line of credit combines revolving flexibility with the rate advantages of collateral-backed financing. By pledging business assets — accounts receivable, inventory, equipment, or commercial real estate — you reduce lender risk and unlock meaningfully lower interest rates than unsecured alternatives. For asset-rich businesses, a secured line is often the most cost-efficient revolving credit facility available outside of SBA programs.
A secured business line of credit is a revolving credit facility collateralized by specific business assets. The borrower pledges assets — commonly accounts receivable, inventory, equipment, or commercial real estate — and receives a credit line at significantly lower rates than unsecured alternatives. The lender holds a lien on pledged assets; in default, the lender may claim those assets to recover outstanding balances.
The most common form is an asset-based line of credit (ABL) where the credit limit is dynamically tied to the value of eligible collateral — typically 75-85% of qualified receivables or 40-60% of eligible inventory. As receivables grow, your credit line grows with them. This makes secured lines a highly scalable financing tool for growing businesses.
Unlike unsecured lines relying primarily on credit scores, secured lines can be approved for businesses with moderate credit when asset quality is strong. Bloomberg notes asset-based lending is among the fastest-growing commercial finance segments. Crestmont's line of credit solutions include both secured and unsecured options.
| Requirement | Typical Threshold | Notes |
|---|---|---|
| Collateral | Receivables, inventory, equipment, or RE | Quality and liquidity of assets matter most |
| Personal Credit Score | 620+ preferred | Strong collateral can offset moderate credit |
| Time in Business | 1+ year | Established asset base required |
| Annual Revenue | $250,000+ | Higher revenue supports larger facilities |
| Asset-to-Debt Ratio | Positive net asset position | Assets should exceed existing liabilities |
| Reporting Capability | Ability to provide borrowing base certs | ABL facilities require periodic reporting |
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Apply Now →| Cost Factor | Typical Range | What to Know |
|---|---|---|
| Interest Rate | 6%-24% APR | Collateral quality and credit drive the rate |
| Credit Limit | $25,000-$2,000,000+ | Based on eligible collateral value |
| Draw Fee | 0%-1.5% per draw | Lower than unsecured alternatives |
| Annual Review Fee | $500-$2,000 | Annual facility renewal and audit costs |
| Field Exam Fee | $1,000-$5,000 | For large ABL facilities requiring on-site audits |
| Prepayment Penalty | None on draws | Termination fees may apply if closing facility early |
Collateral pledging reduces lender risk, directly lowering your interest rate. Secured lines typically carry rates 5-15 percentage points lower than comparable unsecured products.
Asset-backed credit lines can scale to millions for businesses with substantial receivables, inventory, or equipment — far beyond the typical $500,000 cap on unsecured lines.
When collateral quality is strong, lenders can approve secured lines for businesses with credit scores in the 600-640 range that wouldn't qualify for comparable unsecured products.
Asset-based lines automatically scale with your business. As receivables increase and inventory builds, your borrowing base and available credit expand — providing more capital exactly when needed most.
No obligation. No hard credit pull to check your options. Apply today with Crestmont Capital.
Check My Options →A wholesale auto parts distributor with $4.2M in annual sales needed a flexible credit facility to fund seasonal inventory builds. Using $1.8M in eligible inventory as collateral, they secured a $900,000 secured line of credit at prime + 2.5%. They draw and repay as inventory turns, paying interest only on amounts outstanding — saving $60,000 annually compared to their prior term loan.
A commercial janitorial services company billed $180,000 monthly on 45-day terms to corporate clients. Their secured line — collateralized against A/R — let them draw $120,000 to cover labor costs immediately, then repay as clients paid. The facility eliminated the need to turn down new contracts due to cash timing gaps.
A heavy equipment dealer needed $2.5M to maintain showroom inventory across multiple product lines. A secured revolving credit facility collateralized by the equipment inventory funded new acquisitions at auction and was repaid as units sold. Interest cost was 60% lower than unsecured alternatives, materially improving gross margin on each transaction.
A manufacturing firm used a secured line against $3M in equipment and receivables to fund a $1.1M acquisition of a smaller competitor. The line bridged the gap while SBA loan paperwork was processed. Once the SBA term loan funded, the line was repaid and reset — available again for the next opportunity.
| Product | Approval Speed | Rate Range | Best For |
|---|---|---|---|
| Secured LOC | 3-7 days | 6%-24% APR | Lower rates with collateral, scalable limits |
| Unsecured LOC | 1-5 days | 8%-36% APR | No collateral, lower limits, higher rates |
| SBA CAPLine | 30-60 days | 6%-10% APR | Lowest rate, heavy documentation |
| Invoice Factoring | 1-3 days | 1%-5%/30 days | Sell receivables, not borrow against them |
| Term Loan | 1-10 days | 9%-40% APR | Lump sum, fixed repayment schedule |
| HELOC / RE Equity Line | 3-4 weeks | 7%-15% APR | Real estate backed, personal or commercial |
Join thousands of businesses who chose Crestmont Capital for fast, transparent business funding.
Apply Today →Crestmont Capital structures secured lines of credit to fit your specific asset profile and capital cycle. Our team helps maximize your credit limit at the lowest rate.
See also: unsecured line of credit, accounts receivable financing, and invoice factoring.
Common collateral: accounts receivable, inventory, equipment and machinery, commercial real estate. Each asset type carries a different advance rate based on liquidity. A/R: 75-85%; inventory: 40-60%; equipment: 60-80%; real estate: 65-80%.
Lenders apply advance rates to eligible collateral: typically 75-85% of qualified A/R (under 90 days, non-concentrated) and 40-60% of eligible inventory. Your borrowing base certificate documents current eligible collateral and available credit.
Yes, in a default scenario. The lender holds a UCC lien on pledged assets and can claim them to recover outstanding balances if you default. Borrowing within repayment capacity is critical.
After initial setup (3-7 days for asset verification), ongoing draws are available within 1 business day. ABL facilities with daily reporting can process same-day draws.
A secured line uses receivables as collateral for a loan — you retain ownership and repay as collections come in. Invoice factoring sells receivables to a factor — you receive immediate cash but the factor owns and collects the invoices. Factoring is more expensive but requires no debt repayment.
Yes. Secured lines place greater weight on collateral quality than credit score. Strong A/R with creditworthy customers can support approval at 600-620 FICO, particularly with 2+ years of consistent revenue.
Fast decisions. Competitive terms. Dedicated funding advisors. Apply now with Crestmont Capital.
Get Funded Now →Disclaimer: The information provided on this page is for general educational purposes only and is not financial, legal, or tax advice. Funding terms, qualifications, and product availability may vary and are subject to change without notice. Crestmont Capital does not guarantee approval, rates, or specific outcomes. For personalized information about your business funding options, contact our team directly.
