Pledge: Difference between revisions
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imported>Doug Williamson (Create the page. Sources: The Treasurer, November 2015, p48; Oxford Dictionary of Law, 7th Edition.) |
imported>Doug Williamson (Expand. Source: Global supply chain finance forum.) |
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The borrower remains the legal owner of the item, but if the borrower fails to repay the loan the lender has the right to sell it and to use the proceeds to pay the debt. | The borrower remains the legal owner of the item, but if the borrower fails to repay the loan the lender has the right to sell it and to use the proceeds to pay the debt. | ||
The lender normally retains physical possession of the asset until the debt is repaid. | |||
Revision as of 13:26, 20 June 2016
An item transferred by a borrower to a lender, as a security for a debt.
The borrower remains the legal owner of the item, but if the borrower fails to repay the loan the lender has the right to sell it and to use the proceeds to pay the debt.
The lender normally retains physical possession of the asset until the debt is repaid.
