Spanish serial entrepreneur. Founder of PetCoach.co. Acquired by Petco in 2017. DreamIt Ventures accelerator alumni (Austin 14).
In a startup, I would only accept debt (unless is convertible debt) if you have significant revenues to pay off the debt with your current cash flow and are looking just for extra cash to invest in growth without getting diluted.
Considering you are at a seed stage, thus no (significant) revenue, I wouldn't accept this, specially if they are also requesting a collateral.