The short version
When the thing you’re buying secures the loan (a chattel mortgage, lease or hire purchase), the lender takes less risk, so the rate is typically lower. An unsecured business loan isn’t tied to an asset, so it usually carries a higher rate and shorter term — useful for cash-flow gaps, less so for buying a $40k ute.
Asset-secured finance
- ✓ The asset secures the loan
- ✓ Typically lower rate, longer term
- ✓ Chattel mortgage, lease or hire purchase
- ✓ Best fit for buying vehicles & equipment
Unsecured business loan
- • No asset attached
- • Typically higher rate, shorter term
- • Funded fast, repaid weekly
- • Better for short-term cash flow than asset purchases
Why this matters for the rate you’re offered
Plenty of lenders will happily put an asset purchase on an unsecured product because it’s quick to approve. It’s rarely the cheapest way to buy. A broker who compares a panel of lenders can usually structure the same purchase as secured finance and show you the difference — including the comparison rate, not just a headline rate.
Get the honest comparison
Tell us what you’re buying and a real ALX broker will compare your options across a panel of lenders — secured and unsecured — and explain which costs less for your situation. No obligation.
Compare my options →General information only and not financial or tax advice; it doesn’t consider your circumstances. For any tax treatment, speak to your accountant. Credit eligibility is subject to lender criteria and individual assessment. ALX Finance, Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd).