What is an asset-backed loan?

An asset-backed loan is a loan where the recipient of the loan provides fixed collateral. This collateral serves as security for the loan, which means the lender has the right to sell the collateral if the recipient does not meet the payment obligations.

This term plays an important role in the financial world, particularly in the context of legal provisions, market conditions, and specific business practices. Understanding this context is essential to fully comprehend the risks and benefits of an asset-backed loan.