Collateral

By Entrepreneur Staff

Pencil

Collateral Definition:

The asset(s) used as security in order to obtain a loan

Collateral is an important criteria by which lending institutions and the SBA judge a loan application. Before attempting to apply for a loan, you should prepare an itemized list that precisely describes the collateral you're prepared to offer to secure the loan, such as your home, other real estate, stock investments and so on.

More from Financing

CDC-504 Loan

An SBA loan program that provides long-term, fixed-rate loans of up to $1 million for financing fixed assets, such as land and buildings

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Collateral

The asset(s) used as security in order to obtain a loan

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Bank Relationship

The rapport you establish with the bank with whom you conduct business transactions, which could help smooth the way when it comes to loan applications or special requests

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Bootstrapping

To finance your company's startup and growth with the assistance of or input from others

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