Secured Loan
Loan backed by collateral (asset) lender can claim if unpaid.
Real World
When a small bakery chain takes out a £200,000 secured loan from Barclays using its commercial kitchen premises as collateral, the bank can repossess and sell the property if repayments stop.
Exam Focus
In evaluation questions, stress the risk to the business owner — defaulting on a secured loan means losing the pledged asset, not just a credit score hit.
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