The act of pledging an asset as collateral for a loan without giving up possession of it. The bank required hypothecation of the company's equipment to secure the business loan.
A legal agreement in which a borrower pledges an asset as security for a debt, typically without transferring title or possession. The hypothecation agreement allowed the borrower to continue using the vehicle while it was pledged as collateral.
The earmarking of specific tax revenues for a particular public expenditure or purpose. Opponents of road-pricing criticised the hypothecation of fuel duties for highway maintenance.