After-Acquired Collateral

Definition of 'After-Acquired Collateral'


Collateral for a loan obtained after the borrower has already entered into a loan agreement. The necessity for after-acquired collateral arises when the borrower has insufficient collateral for the loan, but may be acquiring additional property in the near term. This property would serve as after-acquired collateral, and would be automatically collateralized.

Investopedia explains 'After-Acquired Collateral'


The requirement for after-acquired collateral is generally explained in the loan agreement. The need may arise if the lending institution requires more collateral than the borrower can put up, in order to have a greater degree of security for the loan. In this case, the borrower agrees to pledge all future property up to a certain amount, as additional collateral for the loan.



comments powered by Disqus
Hot Definitions
  1. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific benchmark, such as a SPDR. Unlike actively managed ETFs, passive ETFs are not managed by a fund manager on a daily basis.
  2. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another market so that it balances out. So when examining a specific market, if all other markets are in equilibrium, Walras' Law asserts that the examined market is also in equilibrium.
  3. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.
  4. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following:
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction.
  6. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious debt when government leaders use borrowed funds in ways that don't benefit or even oppress citizens. Some legal scholars argue that successor governments should not be held accountable for odious debt incurred by earlier regimes, but there is no consensus on how odious debt should actually be treated.
Trading Center