Fund Credit Corporation asks Gro-Sales Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired property. This is

Question

Fund Credit Corporation asks Gro-Sales Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired property. This is​

Quizplus · Accepted Answer

A security agreement that covers after-acquired property is known as a floating lien. This type of security interest allows the lender to obtain a security interest in property acquired by the borrower after the security agreement is executed. It is not in violation of secured transactions law as long as it meets the requirements set forth by the Uniform Commercial Code (UCC).

Fund Credit Corporation Asks Gro-Sales Company to Agree to a Security