Under the UCC, to avoid the problem of constantly issuing new financing contracts every time a business buys more inventory from a supplier, the parties may use:

Question

Quizplus · Accepted Answer

A floating lien allows for continuous financing of inventory without the need for constantly issuing new financing contracts. It allows the lender to have a security interest in inventory that is acquired after the initial financing agreement is made. This avoids the hassle and cost of constantly drafting new contracts for each new batch of inventory.

Under the UCC, to Avoid the Problem of Constantly Issuing