Answer to Question #222203 in Accounting for Nicoleen

Question #222203
Does an entity need security for a loan
1
Expert's answer
2021-08-03T12:36:28-0400

Yes entity need security for a loan


The security acts as a protection against potential loss for the lender should the borrower fail to make the payments.

In such a case the collateral security becomes the property of the lender to compensate for the unreturned borrowed cash.



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