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Rubbing unsecured loan against secured loan
(Comparing secured and unsecured loan as applied to your case)
You will need to evaluate your time schedule again. There are market pulls, creditors and vendors all around.
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Given this situation and no immediate chance of recovery of your credit score or personal finance you have an inclination to go for unsecured business startup loans. You can't afford to loose much time hoping for things to change. So begin by asking questions to your own self.
Are you going to have a credit line (existing business) or an unsecured term loan?
How much will be your potential loss if you have to wait for the situation to change and you are able to give a collateral security?
Whether the potential loss can be offset by the lower interest rate of secured loan?
Can you renegotiate your unsecured loan midway when your credit score improves? Or else can you refinance the old debt with a better loan?
What is the extent of monetary benefit over the whole term supposing you were to adapt the above scenario no. 3?
Answers to these questions should guide you to making a pragmatic decision. Additionally your costs are going to mount up continually adding burden on working capital. This is in addition to the already high rate of interest on the unsecured loan you borrowed.
Making a decision on a type of loan
If your business plan is sound and execution is exceptional, you have not much to worry about. The business plan however good it is, may need a fresh look midway and not a midway change of course. At this point in time, if you can hold your morale up and have the guts to refinance the unsecured loan to retire the high cost debt, you can just do it. There all the reasons for you to believe you will win. In the ultimate analysis (start ups) of medium to long term benefits what wins should be your natural option. As it is said, it takes a sound business plan and the real shrewd businessman in you to succeed even with the high interest unsecured loan. A slight waywardness on your part or a mishap on the way can all upset you by a thousand miles.
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