LTV percentage shows how much lending is being provided against the assessed value of collateral. In MSME secured lending, it is commonly used for property-backed loans, vehicle finance, equipment finance, and other asset-backed facilities. A lower LTV generally gives the lender more collateral cushion, while a higher LTV leaves less margin if asset value falls. For example, a ₹70 lakh loan against eligible collateral value of ₹1 crore gives an LTV of 70%. This matters because collateral value can change and recovery costs can reduce actual realisation. The common caution is to calculate LTV on eligible and enforceable value, not merely market value, and to consider prior charges, distress sale discounts, insurance, and legal defects.