Many online merchant cash advance lenders require the borrower to pay a certain percentage of online sales through a payment processing service such as PayPal. As a result, these loans are considered unsecured; although they are partially secured.
Defaulting on an Unsecured Loan. If a borrower defaults on a secured loan, the lender can repossess the collateral to recoup loan application form personal losses. In contrast, if a borrower defaults on an unsecured loan, the lender cannot claim property. However, the lender can take other actions, such as commissioning a collection agency to collect the debt or taking the borrower to court.
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