Here are types of collateral most lenders may accept for business loans:
Property– some of the most commonly offered and accepted types of collateral are real estate property such as homes.
Cash Secured Loan-Cash secured loans are normally tied to certificates of deposits or savings accounts. You have to get the loan from the same lender that holds your CD so that he can place a freeze on that account. The freeze prevents you from accessing funds in the account until you have paid off the loan.
Inventory Financing-It is an asset backed, revolving line of credit or short term loan made to a retailer or a small entrepreneur or a SME so that it can purchase products for sale. Those products or inventory serves as collateral for the loan if the business doesn’t sell its products and cannot repay the loan.
Invoice Collateral-Invoice collateral is a way for businesses to borrow money against the amounts due from the customers. Invoice collateral helps businesses improve cash flow, pay employees and suppliers and reinvest in operations and growth earlier than they could if they had to wait until their customers paid them. Here borrowers pay a percentage of the invoice amount to the lender as a fee for borrowing the money. Invoice collateral can solve problems associated with customers taking along time to pay and difficulties obtaining other types of business credit.
We at Lenbor help you to finance slow paying accounts receivables or to meet short term liquidity.
Invoice financing benefits the lenders too because unlike extending a line of credit, which is unsecured and leaves little recourse if the business does not repay what it borrows, invoice acts as a collateral. The lender also limits its risk by not advancing 100% of the invoice amount to the borrower.
Blanket Liens-A blanket lien is a lien that gives the right to seize, in the event of nonpayment, all the assets serving as collateral owned by the borrower (debtor). A blanket lien gives the lender a legal interest in all of the borrower’s assets.
Others- it may include farm assets and products, insurance policies, paper investments and valuables such as fine art, jewelry or collectibles.
Collaterals may differ for the category of loan asked that is for personal loans persona; real estate, home equity, personal vehicles, paychecks, savings accounts, paper investments or other valuables such as fine art and jewelry.
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