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Side Collateral

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Side Collateral
Collateral that only covers a portion of the value of a loan. For example, one may pledge a $10,000 certificate of deposit to cover a $50,000 loan. Side collateral lessens the risk of a loan, but not as much as full collateral.


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Relationship: Commercial Banker - Mortgage Broker A commercial bank had gotten a neighborhood strip center as side collateral for a loan to a furrier, and the latter was having problems.
 
 
 
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