What can be used as collateral for a business loan in Plainview, TX? Things the business owns and can document: work trucks and other equipment, receivables from customers, stock on the shelf, or a general lien on all business assets. Which of them can secure an offer is the funding partner's call, and Cliffway Funding Group passes the request along for that review. Buildings and land are outside this site.
Collateral is what a business pledges behind a funding offer: equipment and work trucks, receivables, inventory or a blanket lien on all business assets. The funding partner decides what it accepts. Real estate is outside this site.
What Is Blanket Lien Collateral? Notes for Contractors
A blanket lien is a claim on all of a business's assets at once rather than on one named item. If the business stops paying, the lender's claim reaches the trucks, the tools, the receivables and the materials in the yard, not only the thing the money bought.
For a contractor, the difference is practical. With equipment financing, the skid steer or trailer being bought is the collateral, and the other trucks and tools stay unpledged for a later request. With a blanket lien, everything stands behind the one debt, and another funding source has less to work with. An offer that includes a blanket lien names it in the documents, and that line is worth reading before signing.
Retainage owed on finished jobs, materials bought for upcoming work and the work trucks are all business assets a blanket lien can reach. The construction industry page covers which contractor purchases fit which funding option.
Types of Collateral for Business Loans When a Plainview, TX Retail Shop Needs Signage
The types of collateral a funding partner may consider fall into a few groups:
- Equipment and work vehicles, valued by age, condition and the market for used units
- Receivables, the unpaid invoices customers owe the business
- Inventory, the goods on the shelf or in the stockroom at cost
- Cash pledged from a business deposit account
- A blanket lien covering all business assets together
A retail shop buying a new lighted sign shows how this works for one item. The sign cabinet, the faces and the light modules are equipment, and they can secure an equipment financing request. Mounting the sign on the facade and running power to it is work on the building, outside this site. The retail industry page has more on signs, cases and shelving.
Illustration only, invented figures: a shop finances a $9,400 sign over 36 months at an invented yearly rate of 11.5%, and the sign itself is the collateral. Each of the 36 payments in this example is $309.97.
Do You Need Collateral for a Business Loan? Start With Materials
Whether a Plainview, TX business loan needs collateral at all turns on the product requested and the partner reviewing it. Equipment financing is secured by the equipment as a matter of course. A term loan may be secured by named assets or a general lien. A line of credit may rest on receivables, on a lien, or on the strength of the business's deposits, depending on the partner reviewing it. Nothing on this site can say beforehand which of those a partner will ask for.
Materials are a useful place to start because every contractor and many stores carry them. Lumber, pipe, wire and fittings bought for upcoming jobs are inventory, and inventory can count as collateral. A partner may value them below what the business paid, since cut stock and partial pallets are harder to resell than new, boxed goods.
Collateral is a question at every size of business: in the 2023 County Business Patterns file, 54.4% of the 645 Hale County, TX employer establishments had a staff under five and 86.4% a staff under 20.
Collateral for Small Business Loan: POS Systems and Store Stock
A POS system is easy to finance and hard to resell, which shapes how it is pledged. With equipment financing, the terminals, scanners and printers secure their own payment. Store stock is different: it turns over, so its value as collateral is the stock on hand on a given day.
Illustration only, invented figures: a store holds $32,000 of stock at cost. If a partner counted it at 50% of cost, the stock would support $16,000 in this example. The same store has $26,000 of open invoices from business customers, $19,800 of them less than 60 days old; counting only those at 80% would support $15,840 in this example. Real partners set their own shares, and some may not count stock at all.
The Plainview, TX page sets out ZIP 79072 business counts by sector for owners who want the local picture.
By Cliffway Funding Group · Updated
