Collateral loan. Such a loan is a loan on a promissory note secured by collateral.  The collateral
in the case of a Wall Street loan consists of securities (stocks and bonds). It is the custom of
banks and other lenders to accept securities as collateral at 80 per cent of their market value. If
the market value of the securities declines subsequent to the making of a loan the lender may call
for (demand) additional securities. The replenishment of the collateral with additional securities is
called remargining. If additional securities are not provided on demand the lender has the right to
demand payment of the loan, no matter if it is a time loan and has not matured. If the loan is not
paid the lender may without further notice sell the securities by public offering (on the stock
exchange or by auction). If the sale of the securities does not realize the amount of the loan the
lender may take judgment for the balance and collect it by process of law.