Depending on the lender that it used there may be small differences. Generally though, lenders let you pay off your loan early without penalty. The competition for your business is fierce and this is a benefit many lenders do offer. Make sure you read the fine-print in your loan agreement to check for penalties and fees.
How do you qualify for a business loan
To qualify for an unsecured business loan you must have been in business for at least 6 months and have a reasonably clean credit history. Clearly cash flow and profitability are a consideration for an unsecured loan but these requirements are generally much lower than people expect.
To qualify for a secured business loan you have to have an unencumbered asset and a means of servicing the loan. When applying for a secured business loan it is less important to demonstrate an ability to service the loan from past performance but to demonstrate a plan to servicing the loan going forward.
To qualify for invoice finance you need to be dealing with commercial customers with normal trading terms. Invoice finance is a great working capital funding option with easy eligibility requirements.
What security is required?
As the name indicates, no security is taken for an unsecured loan. There is a loan agreement with the company and a guarantee by its principals.
Nothing is loaded on the PPSR for an unsecured loan.
For a secured loan security may include a specific security agreement over certain assets, a general security agreement over the company or a mortgage over property.