A furniture store that puts up its inventory as collateral for a loan will grant the lender a floating lien.

Question

Quizplus · Accepted Answer

A floating lien is a type of security interest that attaches to a borrower's assets which are subject to change in form or quantity, such as inventory in a furniture store. By granting the lender a floating lien on the inventory, the furniture store can secure a loan using its assets as collateral.

A Furniture Store That Puts Up Its Inventory as Collateral