Collateral is something valuable you give as security – like a backup promise.
If you’re asking for a big guarantee or loan, they might say: “We’ll give it to you, but if you don’t pay us back or something goes wrong, we’ll take this thing you gave us.”
That “thing” could be cash, property, or even a truck. It’s not a payment – it just sits there as security until the job’s done or the deal is finished. If you stick to the deal, you get it back.
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