Collateral is property or assets pledged to secure a debt or obligation. If the borrower defaults, the lender (or secured party) may have the right to take and sell the collateral (or otherwise enforce its security interest) to help repay what’s owed.
Common examples: real estate (mortgage), a car (auto loan), inventory/accounts receivable (business loan), or cash/securities (margin/secured credit).
Ryan RobertsStartup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.
