Security Agreement for Borrowing Money

Security Agreement for Borrowing Money

Lenders often feel more confident about a loan if they are given a security interest in the assets of a business.  Use this form when some or all of a business's tangible personal property is going to be used for security.

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This Security Agreement is between , Borrower, and , Lender.

Secured Property

Borrower grants to Lender a continuing security interest in the following tangible personal property owned by Borrower, which will be referred to as the Secured Property, which consists of: .

Security Obligations

Borrower is granting this security interest to secure performance of a promissory note dated , that Borrower executed in favor of Lender. The promissory note states that Borrower will pay Lender $ on the terms stated in the note. Concurrently with the signing of this Security Agreement, Borrower will sign a financing statement and other documents that Lender reasonably requests to protect Lender's security interest in the Secured Property. Until the promissory note is fully paid, Borrower agrees to maintain the Secured Property in good repair, and not sell, transfer, or release the Secured Property unless Lender consents.

Notice and Default

If Borrower is more than  days late in making any payment under the promissory note or if Borrower fails to correct any material violations of this Security Agreement within  days of receiving written notice from Lender, Borrower will be in default. If Borrower is in default, Lender may exercise the remedies contained in the Uniform Commercial Code and any other remedies legally available to Lender.

Keep Together
This is the entire agreement between the parties. It replaces and supersedes any and all oral agreements between the parties, as well as any prior writings.
 
Lender's signature: ________________________________________

Date: ________________________________
 
Borrower's signature: _______________________________________

Date: ________________________________
 

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Lenders often feel more confident about a loan if they are given a security interest in the assets of a business. Then, if the borrower does not repay the loan as promised, the lender can take the property the borrower pledged, sell it and use the proceeds to repay (or partially repay) the borrowed amount.

Use this form when some or all of a businesses’ tangible personal property is going to be used for security.

Important to Know:

  • See a lawyer if real estate or intellectual property is the security for the loan.
  • See a lawyer if intangible property -- such as accounts receivable, the right to collect rent under a lease, or a trademark -- is the security for the loan.

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