Wyatt wishes to buy a new combine for his farm to harvest the wheat. The cost of the new combine is about $500,000.00 for which he must secure a loan to purchase. The bank that is willing to loan him the amount requires Wyatt to put up collateral to ensure that if he is unable to repay that loan that the bank will be able to seize the asset to repay the loan. This situation is called

Question

Quizplus · Accepted Answer

A secured transaction involves an agreement in which the borrower provides the lender with collateral for a loan. In this case, the bank requires Wyatt to put up collateral to secure the loan for the combine, making it a secured transaction.

Wyatt Wishes to Buy a New Combine for His Farm