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If you go back a bit, you will find businesses going head over heels for unsecured loans. For most of the past decade, unsecured loans were the most sought-after. The reasons were attractive, though. Fast approvals. Minimal paperwork. No collateral. They were just so perfect and convenient. But, once again, you will find yourself getting convinced that the traditional options are worth a try! Yes, now, in 2025, secured business loans are stepping back into the spotlight.
They say that this time, they promise a more streamlined, accessible, and sensible approach for many businesses. Let’s look at the reasons behind the comeback this year.
What is a Secured Business Loan, Really?
A secured business loan is a type of funding where you pledge an asset, like commercial property, machinery, or even fixed deposits, as collateral. In return, you usually get:
- Higher loan amounts
- Lower interest rates
- Longer repayment tenures
Well, it is not a new concept for 2025. It is a traditional one that is finally getting the credit it deserves.
The Shift from Speed to Stability
Post-2020, businesses were racing to recover. Fintechs offered unsecured loans at lightning speed. Great for emergencies. But for long-term planning, there were still revisions required. So, what happened here:
- Interest rates on unsecured loans soared, often touching 18%.
- Repayment tenures were short, usually 2–3 years.
- Loan amounts were capped, typically around ₹50 lakhs.
On the other hand, by contrast, secured business loans offered a more stable, affordable route:
- Interest rates between 8% and 11%
- Repayment terms stretching up to 15 years
- Loan amounts reaching ₹2–3 crores (or more)
In 2025, secured loans will make more sense as businesses have started to think in longer terms.
Busting the Myth: Are Secured Loans Risky?
One major hesitation behind getting a secured loan is the fear of losing your assets. However, your property or equipment is used as collateral, but that does not mean it is instantly at risk. So, secured business loans are safer and very predictable as long as:
- You plan your repayments.
- You partner up with a transparent lender.
- You use the loan for the right reasons.
The pattern is simple: you are using what you already own to unlock bigger capital without giving up equity or paying sky-high rates.
Why Businesses Are Turning Back to Secured Loans in 2025
Here are the top reasons why businesses are turning back to secured loans in 2025.
1. Lower Interest, Higher Savings
A few percentage points make a big difference, especially on loans worth crores.
| Loan Type | Average Interest Rate | Loan Term | Best For |
| Unsecured | 15–18% | 1–3 years | Emergency short-term needs |
| Secured | 8–11% | 5–15 years | Expansion and working capital |
Over the long run, the savings in interest payments are massive.
2. Larger Loan Amounts
Need ₹1 crore to buy land or ₹3 crore to expand manufacturing? Secured business loans are your go-to. Because lenders have lower risk, they are happy to offer bigger ticket sizes. Plus, you don’t have to dilute ownership to raise funds.
3. Longer Repayment Tenure Gives Lower EMI Stress
Where unsecured loans often need to be paid back in under 36 months, secured loans give you breathing room for up to 10–15 years in some cases. Therefore, you enjoy:
- Lower EMIs
- Easier cash flow management
- Time to generate ROI before repayment bites
4. Collateral Isn’t a Barrier Anymore
Worried you don’t have enough to pledge? In 2025, even limited assets can unlock funding, thanks to:
- Valuation-based lending (loan amount based on asset market value)
- Government-backed credit schemes
- Co-lending models between banks and fintechs
Platforms are helping MSMEs access secured loans with minimal hassle.
5. Faster and Smoother Processing
Are you fed up with endless forms and slow evaluations? Well, with modern NBFCs and consultancies, you can:
- Handle property evaluations
- Offer digital document collection
- Disburse loans within a few working days
6. Better Approval Rates
In a post-pandemic world, lenders have grown cautious. They now prefer collateralised lending. That means if you are applying for a secured loan in 2025, you have a much higher chance of approval compared to unsecured options, especially for amounts above ₹50 lakhs.
7. Ideal for Business Expansion and Long-Term Projects
Scaling operations? Launching a new product line? Opening a second location? Well, secured loans are perfect for:
- Real estate purchases
- Large equipment buys
- Long-term working capital cycles
- Taking advantage of bulk supplier discounts
And you do all of this without chasing investors or giving up shares in your company.
Government Push & Fintech Support
The Indian government is actively pushing MSME growth through:
- Credit Guarantee Schemes (like CGTMSE)
- Interest subvention schemes
- Startup support platforms
Meanwhile, fintech platforms are bridging the gap with:
- Quick online applications
- Risk-based pricing
- Credit assessment tools
Together, this ecosystem makes secured business loans more accessible than ever.
So, is a Secured Loan Right for You?
Do a quick self-check:
| Question | If Yes… |
| Do you need more than ₹50 lakhs in funding? | Consider a secured loan. |
| Do you have property or fixed assets to pledge? | You’re already ahead. |
| Want to avoid equity dilution and keep control? | Secured is better than investors. |
| Need manageable EMIs over 5+ years? | Secured loans fit the bill. |
| Want to pay less interest overall? | That’s a clear, secured win. |
Conclusion
Secured business loans are making a quiet comeback in 2025, and it is not because businesses have suddenly grown nostalgic. It is because these loans:
- Offer lower costs
- Provide bigger capital
- Come with longer tenures
- Are accessible now more than ever
So, if you have got growth in mind and assets on hand, it may be time to bring secured lending back into your business strategy. Remember, sometimes, the smarter move is the one that has been around all along.
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