Collateral in the case of a loan represents an asset of a certain value that a lender can claim from a borrower if the borrower fails to repay the loan according to the contract. Loans from a non-banking financial institution usually require either a personal guarantee or a combination of a personal guarantee and collateral in the form of movable or immovable property.

Collateral in various forms serves as a safety measure for the lender, established in a contract between two parties. If the borrower fails to repay the loan, the financial institution—banking or non-banking—has the legal right, according to the contractual terms, to recover the loaned funds by selling the asset(s) pledged as collateral. This ensures that the borrowed amount is repaid even if the borrower does not make the payments.

There are several types of collateral. In this material, we will refer to those required by Mikro Kapital for the different types of loans in its portfolio. The type of collateral needed is determined after analyzing the loan application, depending on the loan amount, financing period, business analysis, and credit history.

Loans with Personal Guarantee

What is a personal guarantee? In loans, a personal guarantee means that the loan is secured with all present and future assets of the borrower. If a company fails to repay the loan, the non-banking financial institution has the legal right to seize any asset owned by the borrower to recover the loaned amount.

Business loans up to RON 45,000 from Mikro Kapital can be accessed solely with a personal guarantee. For the same amount, agricultural loans also require a personal guarantee. Similarly, eCommerce loans of up to RON 45,000 can be obtained with a personal guarantee.

For all these loans, the contract term is 60 months. The documentation required is minimal, loans can be requested online, no down payment is required, repayment schedules are flexible, and a grace period is offered.

These financial products can be used for working capital, investments, or mixed purposes—both working capital and investment.

Loans with Personal Guarantee and Movable Asset Collateral

For business loans from Mikro Kapital ranging between RON 45,001 and RON 135,000 over 60 months, both a personal guarantee and collateral in the form of a movable asset are required. Since the loan amount is higher, the lender requires extended guarantees.

If the loan is not repaid, the non-banking financial institution may seize any asset offered as collateral, according to the contract between the parties.

The same type of guarantees applies to agricultural loans and eCommerce loans within the same range of RON 45,001–135,000.

Loans with Personal Guarantee and Immovable Asset Collateral

This type of loan applies to business, agricultural, and eCommerce loans where the requested amount ranges between RON 135,001 and RON 700,000, with a contract term of 60 months. The higher the loan amount, the stronger the required guarantees.

Even so, the documentation required is minimal: the ID of the borrower and guarantor, and documents confirming the business activity. In exceptional situations, additional documents may be requested.

Loans Without Collateral

There are also loans that do not require any tangible collateral (movable or immovable). Mikro Kapital offers Credit SupeRRapid, with instant online pre-approval. You can request and receive up to RON 70,000 for a maximum period of 60 months.

Loans with or without collateral from Mikro Kapital have zero down payment, flexible repayment schedules (monthly or seasonal, depending on business needs), and funds are disbursed quickly to ensure the company’s operations are not disrupted.

If you are unsure about which loan is right for your business or its stage of development, you can seek specialized consultancy services.

Summary

Collateral in a loan is necessary for certain types of loans, especially when the amounts are substantial. Guarantees are a way for the lender to ensure they will recover the money lent to the borrower. Mikro Kapital offers a variety of loans so that, regardless of your business activity, you can find the solution that best suits your needs. Personalized loans are essential for small entrepreneurs, whether starting out or growing their business.

In short, collateral in a loan is the method through which the lending institution ensures it will not lose the funds it has provided.

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