A secured transaction is created by means of a security agreement in which a lender (the secured party) may take specified collateral owned by the borrower if he or she should default on the loan. Collateral is the property that secures the debt and may be forfeited to the creditor if the debtor fails to pay the debt.
Article 9 of the Uniform Commercial Code covers most types of security agreements for personal property that are both consensual and commercial. All states have adopted and adapted the entire UCC, with the exception of Louisiana, which only adopted parts of it.
An Installment Sale and Security Agreement in Equipment and Fixtures is a contract between two parties, often a seller and a buyer, that facilitates the sale of equipment or fixtures. The agreement outlines the terms of the sale and the buyer's agreement to repay the seller through installment payments. It also outlines the security interests the seller holds on the equipment or fixtures until the buyer has repaid the full purchase price. Installment Sale and Security Agreement in Equipment and Fixtures can come in two varieties: a true lease or an installment sale. A true lease provides for the seller to retain ownership of the equipment or fixtures, and the buyer to make payments over a period of time in order to use them. An installment sale is similar, but the buyer agrees to make payments over time to eventually purchase the equipment or fixtures.
