A business purchases an airplane from an airplane manufacturer.The business obtains a loan from a bank to purchase the airplane.The bank obtains a security interest in the airplane.The airplane manufacturer is paid for the airplane from of the proceeds of the loan.This is an example of a ________ transaction.

Question

Quizplus · Accepted Answer

This is a three-party secured transaction because there are three parties involved: the business purchasing the airplane, the bank providing the loan and obtaining a security interest in the airplane, and the airplane manufacturer receiving payment from the loan proceeds. The security interest held by the bank ensures that they have a right to repossess the airplane if the business defaults on the loan.

A Business Purchases an Airplane from an Airplane Manufacturer