Collateral
Quick Answer
What is Collateral?
Collateral is an asset pledged to a lender – if the loan fails, the lender takes the asset.
Collateral explained
Property, vehicles and equipment are common collateral. Pledging the family home for business debt deserves independent advice before signature.
Who it applies to: Borrowers seeking secured funding.
Cost: The pledged asset is at risk on default.
Related terms and guides
Official source: Gov.za
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Last reviewed: September 2026 by the BizAnswers editorial team. How we write and check our guides.