The security could be an intangible asset, for example. B the shares of the lending company, or the right to obtain a debt owed by someone else. In general, these are more difficult to evaluate and therefore riskier to accept. The borrower may have limited opportunities to provide collateral that would satisfy lenders. Even if a guarantee agreement only gives a partial interest in the protection of the asset, lenders may be reluctant to offer financing for the property. The possibility of cross-protection would remain, which would constrain the liquidity of the asset in an attempt to release its value and provide compensation to lenders. The existence of a guarantee agreement and a possible right of pledge on these guarantees could affect the borrower`s ability to obtain increased financing from other lenders. The asset that serves as collateral is tied to the terms of the first lender, which would mean that securing another loan against the same land would lead to cross-protection. In the UK, a „real estate pledge“ in legal jargon – the use of land and buildings as collateral – requires a lawyer (for no other good reason than to protect lawyers` monopoly on the transfer of transactions). To cover a loan against another asset, you don`t need a lawyer to be involved. Under the loan agreement, the lender may have the right to repossess ownership of the asset instead of repayment, or he or she may have the right to insist that the asset be sold to repay the outstanding loan and interest (and possibly other unpaid expenses), with the remainder of the proceeds being returned to the borrower. Real estate that can be cited as collateral under a warranty agreement includes product inventory, furniture, equipment used by a company, furniture and real estate held by the company. The borrower is responsible for maintaining the guarantees in good condition in the event of default.

The property mentioned as a guarantee must not be removed from the premises unless the property is necessary in the course of normal activity. Some assets may have already been used as collateral. For example, if a family member buys a home and you lend them money for the surety, the mortgage lender has preferential rights to the proceeds of the sale. If the borrower is late, the mortgage is not required to sell the property at market value (they only want the outstanding loan, interest, and fees), so you may not get your loan back. For each given asset, there may be a number of lenders who have preferential rights that must be repaid before you, so check who else has a right of pledge.. . .