Secured Loan
Short definition
A secured loan is debt backed by a charge over receivables, inventory, property or shares. Spread and limit follow collateral quality; unsecured creditors are pushed down the waterfall.
Detailed explanation
Collateral value, LTV and enforcement liquidity sit below book. A negative pledge restricts new security. Second lien looks only at the residual after first lien.
Release mechanics run as principal is paid or assets are sold. Over-securing consumes financial flexibility.
Why it matters for the CFO
Priority in distress is set by security. The CFO cannot run the firm without a map of what is pledged to whom.
How to read it
The LTV cap cuts the drawable amount. FX can open a collateral gap on FX debt.
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Definitions are educational. They are not investment, credit or tax advice.