This document provides guidelines on acceptable collateral and policies for securing loans through ACCION Texas-Louisiana. It outlines what types of assets can be used as collateral, including vehicles, equipment, inventory, jewelry, real estate, contracts, stocks, bonds, insurance. Details are provided on inspection, valuation and documentation requirements for different collateral types to verify ownership and determine resale value. The purpose is to clearly define collateral policies to appropriately secure loans and recover funds in cases of default.

1. Collateral Assessment

2. ATX-LACollateral Policy
• (ACCEPTABLE COLLATERAL TO SECURE AN ACCION
TEXAS-LOUISIANA LOAN)
•
• Autos (older than 2003 are no longer acceptable; with the
exception of Classic Cars)
• Commercial Vehicles (including tractors, utility tractors and food
concession trailers)
• Equipment
• Inventory
• Jewelry
• Real Estate
• Assignments of Contracts
• Enrollment of loan in ACCION Texas-Louisiana Loan Access
Program (See ATLAP Description).
• Stocks & Bonds
• Whole Life Insurance
• Other accessible assets with good resale value.

3. Collateral Value Matrix

4. Autos & Commercial Vehicles:
• Physical Inspection of collateral is made. Information such as serial
numbers, VIN, license numbers, makes, models, year is collected and
condition is documented and when possible, pictures are taken.
•
• Vehicles must be in running order. This is why we ask borrower to drive
vehicle to office.
•
• Car-Max appraisals are acceptable on personal vehicles
•
• Kelley Blue Book website is used to value vehicles (trade in value)
•
• www.truckpaper.com is used to value commercial trucks and trailers.
Deduct for unusual wear and tear and rugged condition if any.
•
• If available, consult a dealership in your area

5. Equipment/Inventory:
• Applicant needs to fill out the “Collateral Description
Sheet”
• Description must be as detailed as possible for the items
with higher value; including model and serial numbers.
• Reported value must be the value that applicant
considers he could get if he/she were to sell the
equipment.
• Form Must be signed and dated.
• Use invoices if recently purchased or a useful website
such as www.orionbluebook.com or Ebay.
• The equipment must be business related.

6. Jewelry
• An inspection happens right before the file is ready for review, and
not completed before submitting file into preliminary review.
•
• The customer accompanies the loan officer at time of inspection,
once the jewelry is inspected by a qualified appraiser such as a
jeweler, for a QUICK SALE value; the jewelry must remain in our
possession, and the customer is given a copy of the detailed
collateral receipt of the jewelry received by the ACCION staff
member. (A quick sale value refers to fair market value of the
jewelry that the jeweler would be willing to pay for in case of default.
Please note, this value is very different from retail or replacement
value of the jewelry). We are not looking for a formal written
appraisal, but rather a verbal appraisal that can be verified by the
Underwriting Dept.
• Jewelry along with the receipt is placed in safe-deposit box at
corresponding bank or vault till the loan is paid off in full.

7. Real Estate
• Physical Inspection of the real estate/property is
required.
• We cannot accept Homesteads as collateral.
• Use the County Tax Appraisal Districts valuation. In the
state of Louisiana we may consider different valuation,
determines in case by case basis.
• Mobile Homes are acceptable only if it is being used in
conjunction with the land that it is currently situated on.
• Needs to provide copy of Deed.

8. Assignment of Contracts
• WHO CAN USE AN ASSIGNMENT OF CONTRACT TO
SECURE LOAN?
• Only existing businesses can use an assignment of
contract as collateral
• Must be a direct contract (no subcontracts).
• Contract must be with a reputable institution or company.
Example: state, city, School district, Department of
Defense, or major corporations.
• The company providing the contract must be willing to
sign an assignment of contract.
• Contract must show an amount to be paid and dates
timeframes for payment

9. EVALUATEAND GETAN ASSIGNMENT
OF CONTRACT
• Need copy of full contract
• Prepare assignment of contract form and have them to
sign and notarized the form.—Form must be fully
prepared and signed by all parties before request for
closing.
• Continued----
• If the company pays direct deposit then we need to send
an EFT form giving them authorization to have the
payments coming thru direct deposit to ACCION Texas-
Louisiana.

10. GENERAL RULES
• When using an assignment of contract the term of the loan will
be only for the term of the contract.
• Make sure we set everything to receive direct deposit.
• If the payment received from the contract exceeds the balance
(or the monthly payment) on the note then we will cut a check
to borrower for the excess of payment received but ONLY after
the funds have cleared (in case of checks).
• ACCION Texas-Louisiana usually will use other collateral in
addition to the assignment of contract. This is due to the
disbursements of the draws relying on additional factors such
as:
• 1. The job being completed by the contractor (our customer).
• 2. The job also be completed to the specifications of the owner
in order for the checks to be authorized.

11. Acceptable Saving Bonds
• Only Savings Bonds– U.S. issued SERIES EE Bonds.
• Customer would have to have them already in possession–
since there is a turnaround time of at least 3weeks to get
certificate.
• Federal Reserve Form U-1 (purpose statement)
• Certificate will be placed in a safe deposit box till the note is
paid off in full (currently the way car titles are handled).
• Collateral receipt will be issued

12. Acceptable Stock Certificates:
• Traded/sold on the American Exchange, NASDAQ, or
New York Stock Exchange
• Written evidence of equity ownership (stock).
• The most a broker pays for a stock is 50 cents on the dollar,
which is the value that ACCION Texas will give the stock
that the customer is interested in using
• Possession of stock certificate
• Stock power for each certificate, signed exactly as
certificate is issued. Usually signed blank
• Federal Reserve Form U-1 (purpose statement)
• Certificate will be placed in a safe deposit box till the note
is paid off in full (currently the way car titles are handled).
• Collateral receipt will be issued

13. Certificate of Deposits
• Only acceptable if loan officer directly contacts Bank and
confirm that the Bank would honor our lien on the CD.
(some Banks don’t honor the liens)
• CD assignment form completed in triplicate so all
involved parties retain a copy for their records.
• The value of the CD is 100% .

14. Whole Life Insurance
• Assignment of life insurance policy as collateral signed
by insurance company with corporate acknowledgment.
• Not all companies will allow the assignment of a pledge
against the policy.
• ACCION Texas will value it at surrender cash value.
• Loan funds will not be disbursed until all signatures on
assignment and acknowledgment are in place.
• The paperwork is completed in triplicate so all involved
parties retain a copy for their records.
• Customer needs to have this insurance already in place.

15. Acceptable third Party Collateral:
• The general rule of thumb in accepting collateral
owned by a third party is that The Collateral Must be
Attainable.
• Based on this principle we will only accept 3rd party:
• Vehicles
• Land
• Jewelry

16. Collateral Description
• When an applicant fills out an online application, the
collateral description will transfer to the collateral section.
It will appear in the field “Item”. This is usually a brief
general description of the assets that they want to pledge
as collateral. Example: Vehicle, Business Equipment,
Property, etc.
• Before submitting file to final decision loan officer must
enter a complete and detail description of the collateral
on the “description” section.

17. • When entering the collateral description remember that
the way it is described on CRM it is the way it will show
on the security agreement. It is not necessary to enter
every single item detail description

18. Tips for description
• TIP 1: When the list is long only describe the items with
higher value
• Tip 2: Group description for items with low value:
computer equipment, tools, sewing machines, etc.
• Tip 3: Enter a complete and detailed description of major
equipment items like special machinery.
• Tip 4: Use carfax.com to get an accurate description of
the vehicle. It is free and it also helps to verify that we
have the correct VIN.

19. Supporting Ownership & Value
• The documents provided to prove collateral ownership
must be attached on the collateral section.
• The loan officer needs to obtain the collateral value and
verification of the assets before submitting file to final
decision.
• Details of documents needed to prove ownership and for
collateral valuation may vary. User should go by the
existing collateral policy.