What is collateral actually worth?

When it comes to protection, just saying the collateral is worth $1M isn't enough, of course.

❗️ If a borrower defaults, what the business paid for an asset or what it’s worth on the books doesn’t really matter. What matters is how much we can get by selling it.

That’s why we look at the asset type, its condition, liquidity, the secondary market, and how much we might have to discount the price to sell it. The details depend on the business and the type of collateral it provides.

For some projects, we also estimate a more conservative liquidation value.

Next, we look at the LTV (Loan-to-Value) ratio. It shows how large the loan is compared to the value of the collateral.

For example, if the loan is $400,000 and the collateral is valued at $650,000, the LTV is approximately 62%.

The lower the LTV, the bigger the gap between the loan amount and the collateral’s value.

But LTV alone doesn’t guarantee repayment. We also check whether we can seize and sell the asset, whether anyone else has a claim on it, and how much we might recover in the worst-case scenario.

So, the most important thing for us is how much money the asset could bring back to investors if the business’s main cash flow dries up.

⚖️ Do you check the LTV before investing? What LTV feels acceptable to you, and at what point would you walk away?

😉 Share some of your secret tactics in the comments!

🤩 Why do businesses prefer 8lends over bank loans?

For many businesses, the problem isn't that they can't get a loan. They just need capital as soon as possible, often for a specific purpose that doesn't fit rigid banking criteria.

Banks evaluate companies based on a strict set of criteria: credit history, financial reports, time in business, type of collateral, and internal lending limits. Even a strong business might get rejected just because it doesn't fit the bank's criteria.

8lends works differently. We focus on these things:

🔘 Why does the business need the capital?
🔘 How will it use the funds?
🔘 What cash flow will it use to repay the loan?
🔘 What collateral can it provide?
🔘 Can the business generate enough cash flow to repay the debt?

Then there's the matter of speed.

Businesses often need financing for specific purposes: buying equipment, increasing inventory, fulfilling a contract, expanding production, and more. If the loan approval process takes too long, the opportunity might disappear.

In this sense, crowdlending can be more flexible than bank loans.

That doesn't mean our requirements are any less strict. We just focus on a few key things: protecting investors' money, how the business plans to make a profit from the funds it raises, and whether its collateral can cover investors' losses in case of default.

🤩 That's why 8lends can be a much better option for many companies than a bank loan.

If you had a business, what would you choose: funding from 8lends or a bank loan? Share your thoughts!

🤩 WE GAVE AN INTERVIEW AT TOKEN2049!

We talked about how we solve the banking problems small and medium-sized businesses (SMEs) face every day.

People don't talk about this enough. That's why we attended this event: to bring more attention to the problem and share how we at 8lends are solving it.

Our approach benefits everyone: SMEs looking for relatively fast funding and people who want to earn a steady APR on their money.

Feel free to listen to what our CCO, Ivan Marchena, had to say in the interview!

😉 Enjoy the video!

✨ Everything you need to know in one post!

We've collected the most important updates to help you stay up to date:

🤩 About the 8lends platform

🔘 8lends at TOKEN2049
🔘 8lends Review by Marco Schwartz
🔘 CertiK & Cyberscope Audits
🔘 CLEARCHAIN CORP (our legal entity)
🔘 Honest Communication
🔘 KYC
🔘 Maclear
🔘 Story Behind 8lends
🔘 Sumsub (KYC provider)
🔘 Why businesses choose 8lends

🤩 About Investments

🔘 8lends leagues
🔘 Collateral
🔘 How collateral is legally secured
🔘 Invest with fiat
🔘 Invest without KYC
🔘 Project Anatomy (OSS HOLDING)
🔘 Repayments from businesses
🔘 Secondary market
🔘 Smart Contract
🔘 Start With $100
🔘 Value of collateral
🔘 What happens to your money once you invested

🤩 About $8LNDS

🔘 $8LNDS Fundamentals
🔘 $8LNDS Listing
🔘 $8LNDS Purpose
🔘 $8LNDS Stability
🔘 About Scam Tokens
🔘 How $8LNDS Reaches You
🔘 How the Token Section Works
🔘 RWA
🔘 Stage 1
🔘 Track $8LNDS in 5 Major Wallets

📢 Monthly reports

🔘 July 2026
🔘 August 2026
🔘 September 2026

Still have questions? Check out our FAQ or reach out to our team:

🔘 Ask Our Managers
🔘 FAQ

🔈 Our social media

🪙 CoinMarketCap
📱 Facebook
🔗 LinkedIn
✖️ X
🎞 YouTube
😎 Website

😉 Don't forget to like and bookmark this post so you can come back whenever you want to learn more about 8lends!