Pledging

Pledging occurs when movable assets—such as equipment, inventory, or furnishings—are offered as collateral to a lender or creditor. The creditor obtains a security interest in the asset but does not gain ownership. The original owner remains the legal proprietor and retains possession rights unless default occurs.

In commercial real estate, pledging is commonly applied to fixtures, shop inventory, or machinery within leased premises. Upon default, the creditor may sell the pledged asset to recover the debt. This mechanism differs from mortgage, which applies solely to immovable property (land and buildings).