Answers (1) |
k7
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Dec 26, 2006,12:06 am
For security, financial institutions that give out money ensures that you have something to pay back with in case you go into financial difficulty. Say, you borrow $20 from your brother and he tells you that if you cannot pay back within one week, you would have to part with one of your
<br>X-men Collector's Edition comic. So the comic book is your collateral.
<br> Companies usually present properties or shares as collateral. So, if a company cannot pay up, the bank / financial institution just take what the company have put up for collateral as payment. |
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