Secured Transactions (Article 9)

Secured Transactions under Article 9 are legal agreements where a borrower offers a specific asset (like equipment, inventory, or receivables) as collateral to a lender to secure a loan. If the borrower defaults, the lender has the right to seize and sell the collateral to recover the owed money. This system provides lenders with security and confidence, making it easier for businesses to obtain financing. The rules ensure clear priority among creditors and protect both borrowers' and lenders’ rights, promoting efficient credit flow in commerce.