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Part 4 – Collateral
Read the Caskey Trucking Financials and the Caskey Trucking Case. Identify the
availability and quality of the collateral.

What Is the Available Collateral?

Bill and his parents are unwilling to provide any guarantees. The collateral available is the
trucks and related equipment and the accounts receivable.

Collateral One Accounts Receivable

Marketable The accounts receivable is predominantly amounts owing from Bill’s
parents. Unclear if the parents would pay the lender the amount of the
receivable given that they are not willing to provide any guarantees.
Ascertainable The receivable is easy to value as its book value represents its value.

Stable The receivable is highly variable and can range dramatically from
period to period.
Transferable The receivable can be easily assigned to the lender.

Collateral Two Trucks

Marketable There is a large second-hand market for trucks.
The rigging and any specialized hauling equipment may be more
difficult to sell.
Ascertainable Second-hand trucks can be valued using reference pricing guides and
websites or appraisers.
Stable The truck value will be deteriorating but normally in a predictable
manner.
Transferable The truck can be transferred to the lender.

Overall Conclusion
The trucks offer better collateral quality than the receivables. Overall, the collateral quality
is good but could be better with the addition of personal guarantees from Bill Caskey or his
parents or a corporate guarantee from L&L Enterprises.