Secured funding, also called collateralized lending, offers financing arrangements to individuals and businesses looking to raise capital to support growth. Borrowers put up collateral—like property or equipment—to secure a loan, which provides lenders with extra security in the event of default. Secured funding can benefit both parties but also comes with certain risks.
The most significant risk for both borrowers and lenders is tied to collateral. If a borrower defaults, the lender can seize and sell the pledged collateral to regain losses. This may disrupt the borrower’s business operations or lead to extra costs associated with monitoring and maintaining collateral value. Lenders face the risk of being unable to regain losses if collateral is potentially damaged, lost, or declines in value.
ION’s secured funding solutions help mitigate these risks with real-time data and key performance metrics to support order management. Reach out to one of our experts for a live demo of how our solutions support risk management practices.