security interest laws

A security interest is a legal right a lender gains in a borrower's property (like equipment or inventory) to ensure repayment of a loan. If the borrower defaults, the lender can seize or sell the property to recover the debt. These laws, primarily governed by the Uniform Commercial Code (UCC), outline how security interests are created, perfected (made official), and enforced, providing clarity and protection for both lenders and borrowers. Essentially, they help secure loans with collateral, reducing risk and facilitating credit in the marketplace.