Pledging your vehicle or your home as collateral for a loan sounds scary, but don’t worry. Keep reading to learn about the process and what happens to your collateral when you get a loan.

Pledging your vehicle or your home as collateral for a loan sounds scary, but don’t worry. Keep reading to learn about the process and what happens to your collateral when you get a loan.


Images of your car getting taken from you swirl around when you think of pledging it as loan collateral? You’re not alone. We’re here to help clarify and educate.

The specific process and requirements for backing a small business loan differ between financial institutions, but this is how it works at Opportunity Fund.

What kinds of collateral are accepted by Opportunity Fund?

Opportunity Fund accepts motor vehicles, real estate, and UCC-1 as collateral. A UCC-1 is a document which serves as a lien on commercial property. Filing a UCC-1 statement for securing collateral for a business loan is required for business loans under the Uniform Commercial Code (UCC). To learn more click here.

What does pledging collateral entail?

The pledge of collateral is written into the signed loan documents. If you are pledging a motor vehicle, you will need to list Opportunity Fund as a lien holder on the vehicle title – called a “pink slip” in some states. Pledging real estate requires that you sign a Deed of Trust, which is then recorded with the County of Record.  

Speak to one of our staff members for more information if your loan will require backing as each case is unique.

When could collateral be repossessed? How can you stop it?

If your collateral is up for repossession due to failure to pay, Opportunity Fund will send a notification by mail. Generally, you can post payment to your account to halt proceedings. If you find yourself unable to make on-time payments, please talk with one of our staff members. It is our mission to help your small business succeed, and the sooner you reach out to us, the better we can support you.

Once a loan has been paid off, what happens then?

Congratulations! Collateral is released back to you after the loan is paid in full.

The motor vehicle process varies between states and title types, but this process may include Opportunity Fund sending a physical title back by mail with the lien signed off for release or an electronic release with the state who will then mail a clean paper title back to the owner. Check your state’s DMV for more specific details.

Real Estate will have a reconveyance filed by Opportunity Fund. Depending on county requirements, this will be filed electronically or manually.

UCC-1s are released by request or expire after 5 years except for Wyoming.

Once your loan is paid off in full and your collateral is released, your small business is all set for success.


For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or

Loans are subject to credit review. Additional documentation may be required for credit approval. We are an Equal Opportunity Lender. Loans will be made or arranged pursuant to California Department of Corporations Finance Lenders License #6050609.

Opportunity Fund is tackling economic inequality so that hard work and perseverance means a shot at getting ahead, not just struggling to get by. Our programs are supported by a community of donors and investors whose contributions help to fund small businesses, support college students, and build stronger families and vibrant neighborhoods. Since 1994, the team has deployed $600 million and helped 20,000 families earn, save and invest in their own futures. Opportunity Fund has earned a 4-star rating from Charity Navigator, America’s largest independent charity evaluator, for our commitment to accountability and transparency.

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