What Is a Secured Creditor? A secured creditor is any creditor or lender associated with an issuance of a credit product that is backed by collateral. Secured credit products are backed by collateral. In the case of a secured loan, collateral refers to assets that are pledged as security for the repayment of that loan.
What Is Secured Debt? Secured debt is debt backed or secured by collateral to reduce the risk associated with lending. If the borrower on a loan defaults on repayment, the bank seizes the collateral, sells it, and uses the proceeds to pay back the debt. Assets backing debt or a debt instrument are considered as
What Is a Secured Note? A secured note is a type of loan or corporate bond that is backed by the borrower’s assets as a form of collateral. If a borrower defaults on a secured note, the assets pledged as collateral can be sold to repay the note. While secured notes are commonly used to
What Is the Securities Act of 1933? The Securities Act of 1933 was created and passed into law to protect investors after the stock market crash of 1929. The legislation had two main goals: to ensure more transparency in financial statements so investors could make informed decisions about investments; and to establish laws against misrepresentation
What Is Securities-Based Lending? The term securities-based lending (SBL) refers to the practice of making loans using securities as collateral. Securities-based lending provides ready access to capital that can be used for almost any purpose such as buying real estate, purchasing property like jewelry or a sports car, or investing in a business. The only restrictions to
What Is Securities Fraud? Securities fraud, also referred to as stock or investment fraud, is a type of serious white-collar crime that can be committed in a variety of forms but primarily involves misrepresenting information investors use to make decisions. The perpetrator of the fraud can be an individual, such as a stockbroker. Or, it can be
What Is Securities Lending? Securities lending is the practice of loaning shares of stock, commodities, derivative contracts, or other securities to other investors or firms. Securities lending requires the borrower to put up collateral, whether cash, other securities, or a letter of credit. When a security is loaned, the title and the ownership are also
What Is Securitization? Securitization is the pooling of assets in order to repackage them into interest-bearing securities. The investors that purchase the repackaged securities receive the principal and interest payments of the original assets. The securitization process begins when an issuer designs a marketable financial instrument by merging or pooling various financial assets, such as
What Is Securitize? The term “securitize” refers to the process of pooling financial assets together to create new securities that can be marketed and sold to investors. These pooled financial assets generally consist of different kinds of loans, but any type of asset can be securitized. Mortgages, credit card debt, car loans, student loans, and other forms
What Is a Security? The term “security” refers to a fungible, negotiable financial instrument that holds some type of monetary value. A security can represent ownership in a corporation in the form of stock, a creditor relationship with a governmental body or a corporation represented by owning that entity’s bond; or rights to ownership as represented
