Completely makes sense! Because bitcoin's value is set to increase in long run because it is based on scarcity model. But if you need some urgent cash well within your borrowing limit, then it's an wise thing to do. But ensure that you get back the unit value of bitcoin once the loan is repaid. Big corporates may play a little trick here!
Once you have repaid your loan, ensure you will get back the same units if bitcoin that you had collateralize whike taking the loan and not its dollar equivalent!
I agree with the idea of it just like avikz stated it is great and convenient to those who hold BTC and needs a cash but doesn't want to convert their crypto.
To be honest I have been in that kind of situation where I don't want to trade my crypto for cash since I would get some cash in just a couple of days but I don't have other option.