Marcus wishes to finance the launch of a new product by borrowing money from the bank.The bank requires collateral for the loan.What will Marcus use for collateral?
A) a patent the company has for its unique product
B) goodwill from past good performances and customer satisfaction
C) property the company owns and will build on in the future
D) the trademark of the company's very well-known logo

Question

Quizplus · Accepted Answer

Property that the company owns and plans to build on in the future is the best choice for collateral because it provides a tangible asset that the bank can seize and sell if the borrower defaults on the loan. Patents and trademarks can have value, but they are not as easily liquidated as property. Goodwill from past performance and customer satisfaction cannot be used as collateral because it is an intangible asset.

Marcus Wishes to Finance the Launch of a New Product