1. Money

Collateral

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Collateral describes the assets you pledge in order to receive a business loan. Collateral may include business or personal assets, such as the equity in your home or car. The assets can then be seized by the lender if you fail to pay on the loan. If you have collateral, you can get a secured loan at better rates than if you had no collateral. Loans without collateral are unsecured loans.

One of the reasons it is more difficult to receive a loan for a startup is that there are not yet any business assets which can be used as collateral.

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