Unsecured Loan

See: Unsecured Debt.

Nothing formally "secures" the loan. No assets backing it. No collateral. Just a handshake, and a "Yep, I'll pay."

You'd imagine that loans secured by nothing other than a handshake would carry a higher interest rate versus loans secured by, say, 4,000 acres of an oil patch. That is...if we don't pay you the $12 million we're borrowing here, then you can own 4,000 acres of oil rich land. Way different risk dynamics for the lender.

See: Debenture. See: Subordinated Debenture.