When a business uses some of their assets as collateral for debt it is called asset based financing. This broad category includes specialized financings that cover just a particular type of asset:
- accounts receivable for factoring,
- real estate loans,
- equipment financing,
- inventory financing.
These types of financings tend to be specialized because particular knowledge is needed both to assess the value of assets (and appropriate loan-to-asset ratios), and to generate cash from those assets if the business defaults on the debt.