Bank collateral definition

Collateral -- assets that can be pledged to a lender in the event of a loan default -- is typically considered tangible property, such as:

- Real estate (personal or business)
- Equipment
- Cash, such as in a CD
- Inventory
- Accounts receivable

However, in many cases collateral can also be augmented by the goodwill you've built with your banker. A business that has performed as promised over the years should expect to have established a level of goodwill that actually adds leverage to the physical collateral.