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Pledging of assets

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Under what conditions would a firm consider pledging assets for short-term funds?

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The answer contains meaning of pledging of asset and the conditions under which the asset will be pledged by the firm.

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Dear student,

Meaning of Pledging of asset:
Pledging of assets means offering assets to the lender as collateral for the loan. During the period of loan the lender has the possession of the asset and not the ownership of the asset. If the borrower defaults the repayment of loan and interest, then the lender will become the owner of the asset. Pledging of assets can be
1. Pledging of shares, stocks or other securities
2. Pledging of accounts ...

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