collateral loan Definition | Business Dictionaries from AllBusiness.com
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Business Definition for: collateral loan
collateral loan

loan secured by a pledge of assets. Loans secured by collateral are primarily commercial loans where the ultimate source of repayment is the borrower's assets, rather than the borrower's character or reputation in the community. The lender's financing statement lists the collateral securing the loan, and the location and condition of the collateral. When filed with a public records office, a lien is created, giving the lender priority over other creditors.

See also security interest , Uniform Commercial Code (UCC) , mortgage , security agreement , asset-based lending , perfected lien , cash flow loan
Copyright c 2006, 2000, 1997, 1993, 1990 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.

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