A Guide to Collateral and Business Loans

Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is Collateral?
How Collateral Works
What Can and Can’t Be Used as Collateral
Accounts receivable (invoices you’ve sent out) Buildings Equipment Home equity Future sales Inventory Real estate Securities Certificates of deposit Corporate bonds Stocks Treasury bonds
Vehicles
How Much Collateral is Required for Business Loans?
Capacity: What is your debt-to-income ratio? Capital: How much money do you have? Character: What is your credit history? Do you have a history of on-time payments? Collateral: Do you have any assets that can act as collateral for the loan? Conditions: How much do you need, and what do you need it for? What are the going interest rates right now?
Is Collateral Necessary for Business Loans?
Unsecured Business Loans
Specific Collateral vs General Liens
The Takeaway
About the Author
Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
Share this article: