personal property security interests

A personal property security interest is a legal claim a lender or creditor has on a borrower's movable assets—like inventory, equipment, or vehicles—to ensure repayment of a loan. If the borrower defaults, the creditor can seize or sell those assets to recover the money owed. This interest is often documented through a security agreement and may be perfected by filing or taking other steps, giving the lender priority over other creditors. Essentially, it provides the creditor a legal assurance that the borrowed funds are protected by specific collateral in personal property.