If Boulder Co. fails to make payments on its long-term business loan for earthmoving equipment, the bank will repossess it because the equipment serves as
A) a line of credit.
B) insurance.
C) collateral.
D) credit.
E) capital.

Question

Quizplus · Accepted Answer

The equipment serves as collateral, meaning it is used as a security interest for the loan. This means that in the event of default, the bank has the right to seize the equipment to recover the amount owed on the loan.