A secured purchase is financing or purchase that is secured by collateral. It entails a borrower or buyer, known as the debtor technically, and a lender or seller, known as a creditor technically, and more specifically known as a secured party. Common secured transactions add a bank loaning business money therefore the continuing business can buy inventory, or an ongoing company offering business equipment on credit. In these transactions, the business is the debtor, the lender or the selling company is the creditor, and, most likely, the equipment or inventory will be at least part of the security.
A creditor has a security interest in a security and becomes a secured party, if and when a security interest “attaches.” Beneath the UCC, a security interest generally does not connect unless three basic requirements are met. “Authenticates” a security agreement. Let’s briefly look at each one of these requirements. Value. A secured deal is an agreement between your debtor and the secured party. Like most contracts, there must be an exchange of thought between your parties.
In other words, there should be an exchange of value. In the full case of secured transactions, the value given by the secured party is obvious usually. For example, a bank gives value to a debtor when, in conjunction with a security agreement, it loans money to the debtor to buy inventory.
- ► November (23)
- 6 years ago from Philadelphia
- Land or Building, or
- Jones Lang LaSalle [Current Openings]
- Interest, dividends, annuities, royalties, and rents