When a business lends another business money, it should perfect its security interest by:

Question

Quizplus · Accepted Answer

Filing a financing statement with the state secretary of state is the most common and effective way for a business to perfect its security interest when lending money to another business. This allows the lending business to claim priority over other potential creditors in the event of the borrowing business's default or bankruptcy. The other choices listed are not relevant to perfecting a security interest.

When a Business Lends Another Business Money, It Should Perfect