# Collateral and Debt

The borrower will obtain a corresponding loanable quota after depositing the collateral. Patronus adopts a set of rules to limit and evaluate the borrower's real-time borrowing capacity. 

<figure><img src="/files/S0dYRNal0ZHViwExyaZx" alt=""><figcaption></figcaption></figure>

To measure and the two-side market risk of collateral and debt, Patronus use collateral factor and debt factor in lending system.

**Collateral Factor.** It represents the ratio of weighted collateral value to actual collateral value. For instance, if the real collateral value is 100 and Collateral Factor is 0.8, the weighted collateral value is 80.&#x20;

**Debt factor**. It represents the ratio of weighted debt value to actual debt value. For instance, if the real debt value is 100 and the Debt Factor is 1.25, the weighted debt value is 125. The total value of weighted debt cannot exceed the maximum borrowing capacity.


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