Final answer:
Collateral required for a loan is often property or equipment that lenders can seize if the loan is not repaid, in addition to credit checks and possibly a cosigner.
Step-by-step explanation:
When it comes to securing a loan in the financial capital market, banks often require collateral as a form of security. Collateral refers to something valuable, typically property or equipment, which the lender has the right to seize and sell if the loan is not repaid. This provides a way for the lender to recover the lent funds in the event that the borrower defaults on the loan. Alongside requiring collateral, lenders may perform a credit check to assess a borrower's credit history and may also request the involvement of a cosigner. A cosigner is another individual or firm that legally commits to repaying the loan if the original borrower fails to do so.