Asked by MUHAMMAD SUFYAN on Jul 27, 2024
Verified
A furniture store that puts up its inventory as collateral for a loan will grant the lender a floating lien.
Floating Lien
A provision, placed by the creditor, in a security agreement that a security interest of the creditor also applies to goods the debtor acquires at a later time.
Inventory
Goods held for sale or lease, or raw materials used or consumed in a business.
- Identify the types and features of secured transactions.
Verified Answer
AV
Angel VillegasAug 03, 2024
Final Answer :
True
Explanation :
A floating lien is a type of security interest that attaches to a borrower's assets which are subject to change in form or quantity, such as inventory in a furniture store. By granting the lender a floating lien on the inventory, the furniture store can secure a loan using its assets as collateral.
Learning Objectives
- Identify the types and features of secured transactions.