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The independent creditors may even give loans to Salvatore and Sons for more funding. As a result, Salvatore and Sons will encounter insolvency in case of project failure, but Salvatore Oil (project sponsor) isn't answerable for the previous’s debt repayment. 

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It's really a style of secured loan when you can avail cash by maintaining an asset as collateral into the lender.

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It is just a probability of reduction on account of the borrower's failure to satisfy a credit card debt or repay a loan amount. Also, it is a possibility towards the lender as they may not receive the initial principal and desire sum.

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