Managed collateral through a trust: I set up a local access fiber to the home company in Iowa in 1996 and after we invested all our available capital in plant

Managed collateral through a trust: I set up a local access fiber to the home company in Iowa in 1996 and after we invested all our available capital in plant and equipment, we needed a line of credit to provision an unexpectedly large customer. We needed $400k and our assets were worth multiples of that, but they were not corn, securities or real estate (which is all that Iowa banks had any comfort with). An investor had $100k in a securities portfolio, which he was happy to pledge as collateral for the deal, but he did not want to lose the ability to trade the securities. So we set up a trust agreement with our local small town bank and trust, into which our guarantor contributed $100k. The bank (as trustee) opened an online discount brokerage trust account, into which they deposited the funds. Under the trust agreement, the guarantor had the right to trade the securities (but not withdraw any capital) and we had the right to pledge the entire value of the account as collateral towards our $400k line of credit at another bank. This was adequate (together with our plant and equipment) to get a non-recourse $400k line of credit. This technique could be used with virtually any type of collateral.