The owners of an amusement park want to finance the purchase of a new roller coaster using the roller coaster as collateral for the financing.What type of arrangement should the owners make with their bank?

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A chattel mortgage allows the owners of the amusement park to use the roller coaster as collateral for the financing. A line of credit is not appropriate in this situation as it is a revolving source of funding, not a loan secured by collateral. A term loan would require other collateral or a personal guarantee, which is not optimal in this situation. A real estate mortgage is not appropriate as it is secured by property, not personal property such as a roller coaster.

The Owners of an Amusement Park Want to Finance the Purchase