One sort of business in the world is that you can buy old ships, take them apart, and sell the scrap metal and stuff for more than you paid for the ship. Another sort of business is that you can lend people money to do that business: You lend them money to buy a ship, they buy the ship, they break it down, they sell the scrap, they get money, they pay you back.
It is natural, if you are lending people money to buy a big asset, to take the asset as collateral: You lend them money to buy the ship, they promise to pay you back, and if they don’t pay you back then you can seize the ship.
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