Article 9 (Secured Transactions)

Article 9 of the Uniform Commercial Code (UCC) governs secured transactions, which involve loans backed by collateral. When a borrower pledges an asset (like a car or equipment) to secure a loan, the lender gains a legal right to that asset if the borrower defaults on payments. This article outlines rules for creating and perfecting security interests, which protect lenders’ rights and clarify priorities among creditors. Essentially, it helps ensure that lenders can recover their money by claiming the collateral, while also providing borrowers the ability to access credit using their assets as security.