What each really means
A secured line is backed by identified collateral — receivables, inventory, equipment, sometimes property — with a lien registered against it.
An unsecured line has no specific collateral, but almost always has a personal guarantee, and frequently a blanket UCC filing over business assets. That combination is much closer to secured than the word suggests.
Read what the UCC filing actually covers. A blanket filing over all business assets is not what most people picture when they hear 'unsecured'.
The trade
Secured typically means a materially lower rate, a larger limit and a lower credit bar. It also means specific assets can be taken.
Unsecured typically means faster setup, a smaller limit and a higher rate, with the personal guarantee still standing behind it.
For a business with genuinely unencumbered assets and a clear use, secured is usually the better economics. For a business whose assets are the thing generating the revenue, the calculus is less obvious.
Questions to ask before signing either
Exactly which assets does the lien cover — this specific equipment, or everything the business owns?
Is there a personal guarantee, and is it limited or unlimited? An unlimited guarantee on an unsecured facility is a common and under-noticed combination.
What triggers a limit reduction or a demand? Review terms are where the real risk in a revolving facility sits.
How does this interact with any existing UCC filing? Priority matters, and an existing blanket filing can block a secured line entirely.