A three-party secured transaction occurs when a seller sells goods to a buyer who has obtained financing from a third-party lender who takes a security interest in the goods sold.

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In a three-party secured transaction, the seller, the buyer, and the third-party lender are all involved. The seller sells goods to the buyer, who obtains financing from the third-party lender, and the lender takes a security interest in the goods as collateral for the loan. This is a common arrangement in commercial transactions.

A Three-Party Secured Transaction Occurs When a Seller Sells Goods