The types of collateral DreamSpring accepts vary by the amount requested; your Loan Officer can guide you through your specific collateral options as part of the application process. Please note that you may be eligible for an interest rate discount if you can fully collateralize the loan.
- Business Lien: Our smaller loans are secured by a blanket lien on the business. (What is a lien?)
- Real Estate: Vacant land, residential real estate, and commercial real estate can be used as collateral for certain loans. Please note that if the equity position is large enough on real estate, it may be possible to consider it as a second lien position. (What is a lien?)
- Vehicles Owned Free and Clear: Vehicles either owned personally OR by the business can be used as collateral for certain loans. Please note that vehicles with an existing automobile loan cannot be used as collateral.
- Furniture, Fixtures, Business Equipment, and Inventory: Business equipment, along with furniture and fixtures owned by the business, can be pledged as collateral for some loans. The value of equipment is determined by looking at comparable assets during the underwriting process. The value of business equipment can vary substantially depending on the industry. Inventory is also acceptable but will not be valued as highly as other forms of collateral.
- Personal Assets: Personal assets — including, but not limited to, appraised jewelry, art, or collectables — may be used to help secure collateral value on some loans. If personal assets are the only source of collateral, the maximum loan amount will be capped.
- Certificates of Deposit (CDs): You may use the balance of CD accounts you own as collateral for some loans. This allows you to borrow against your balance rather than withdrawing funds, maintaining your investment without incurring penalties.
- Small Business Administration (SBA) Guarantee: Our Community Advantage 7(a) loans may be collateralized by an SBA guarantee, issued to eligible for-profit small businesses that are structured under SBA requirements.
Effective July 20, 2024 DreamSpring offers uncollateralized options for applicants seeking less than $20,000 and with credit score above 650.
Interested in a DreamSpring loan for your small business? See an overview of all DreamSpring products here.
Questions about collateral on your loan application? Email us at loans@dreamspring.org for assistance.