Attachment of a Security Interest

The video tutorial explains the concept of attachment in lending, where a lender extends value to a debtor who owns collateral property. It details the requirements for a security agreement, including the need for a written document signed by the debtor with a reasonable property description. The tutorial also covers the concept of after acquired collateral, allowing security interests to attach to new inventory acquired with funds from sold inventory.

What is the primary purpose of a security agreement in the context of attachment?

• To secure the loan with the collateral property

• To establish ownership of the collateral property

• To evaluate the creditworthiness of the debtor

• To determine the interest rate of the loan

Which of the following is NOT a requirement for a security agreement to establish a security interest?

• It must be notarized by a public official

• It must include a reasonable description of the property

• It must be signed by the debtor

• It must be a written document

What does a 'reasonable description' in a security agreement mean?

• A brief mention of the property type

• A description that allows a reasonable person to identify the property

• A detailed technical specification of the property

• A legal definition of the property

What is 'after-acquired collateral' in the context of a security agreement?

• Collateral that is not subject to the security interest

• Collateral that is acquired before the security interest is established

• Collateral that is acquired after the loan is repaid

• Collateral that is acquired after the security interest is established

How can new property be made subject to an existing security interest?

• By including a clause for after-acquired collateral

• By renegotiating the loan terms

• By selling the existing collateral

• By obtaining a new loan