Glossary

Collateral

Collateral is a business asset, such as equipment, inventory, receivables, or property, pledged to back a financing arrangement. It gives a lender something to look to if the business cannot meet the obligation. Financing that is backed by collateral is described as secured; financing without it is unsecured. Lenders weigh available collateral alongside other structural details like revenue and time in business, and a funding marketplace uses those details to surface relevant matches.