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CEFR C1 — Advanced

Collateral

Definition

(formal) Additional security or a guarantee provided to support a loan or other financial agreement, often in the form of assets that can be seized if the borrower defaults; secondary or indirect consequences of an action or event.

Example Sentences

1The bank required collateral in the form of property deeds before approving the mortgage application.
2Can you explain the potential collateral damage to the environment if this project goes ahead?
3The company's financial troubles were collateral to the main issue of declining market share.
4In the event of default, the lender may seize the collateral to recover the outstanding debt.
5The new policy aims to minimize collateral effects on local businesses during the construction phase.

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