Security Agreement

A security agreement is a legal document that outlines the terms under which one party (the borrower) pledges an asset to another party (the lender) as collateral for a loan. This agreement specifies details such as the type of collateral, the obligations of the borrower, and what happens if the borrower fails to repay the loan. By signing this agreement, the lender secures a legal right to take possession of the collateral if necessary. It helps both parties understand their rights and responsibilities in a lending arrangement, ensuring clarity and security in the transaction.