It is certainly still possible to get loans on collateral. If you have equity in a home then most banks will give you a loan using the home as equity and they don't much care how you intend to use the money. This is what a HELOC is (Home Equity Line of Credit).
The bank gives you a loan that is somewhere less than the amount of equity you have in the home for you to spend as you please. If you don't pay it off they take the house. I know several people who have started their own businesses later in life and used this time of lending to finance their own startup capital.
I'm not surprised that the bank would do this for a car loan for your dad, but I am a bit surprised that it was even needed. Typically when purchasing a vehicle on loan the vehicle you are purchasing serves as it's own collateral.
If you have a decent credit rating then a new car loan will typically have a lower interest rate than a home mortgage. Car manufacturer captive lenders subsidize the rates to increase sales. And most consumers will default on their car loan last because they need the car to get to work. If you're desperate you can always sleep in your car but you can't drive your house.
The bank gives you a loan that is somewhere less than the amount of equity you have in the home for you to spend as you please. If you don't pay it off they take the house. I know several people who have started their own businesses later in life and used this time of lending to finance their own startup capital.
I'm not surprised that the bank would do this for a car loan for your dad, but I am a bit surprised that it was even needed. Typically when purchasing a vehicle on loan the vehicle you are purchasing serves as it's own collateral.