(2) another agreement is not necessary to enforce an interest in the protection of the property. The debtor or agent must sign the security agreement. Guarantee agreements may be void for errors made on behalf of the debtor. Make sure that related companies make sure that the signing of your security contract matches the correct legal name of the debtor. In the case of interest in the purchase guarantee in the inventory, the interest in the security must be refined before the debtor takes possession and the purchase money lender must inform all previously secured parties of the intention to acquire an interest in the purchase guarantee for the inventory before the debtor takes possession. If the goods you are selling are in your debtor`s inventory, you should search the UCC declarations to see if another creditor has a competitive security interest in the debtor`s inventory. In the financing statements submitted, you will find the name and address of the previously secured party. You must send a message to all previously secured parties to describe the goods you wish to sell and indicate that you intend to keep a safeguard interest for them. When a lender makes available to a buyer the means to purchase goods, the lender may receive a “security interest in purchase money”. When typically selling heavy equipment, the subcontractor who buys heavy equipment must borrow money for the purchase. The seller of the heavy equipment or the bank lends money to the excavation subcontractor to buy the equipment.
The seller of heavy machinery or the bank “retains” a security interest in the purchase money. If the excavation subcontractor grants a pledge right to this equipment at a later date after purchase, the interest in the warranty is not a purchase money guarantee interest. The precise classification of guarantees is essential for security agreements. Often, the classification depends on exactly how the debtor uses a particular asset. For example, a qualified vehicle, used primarily for personal or family purposes, may be considered a consumer good. However, if the vehicle is offered for sale, it can be considered as inventory. When the vehicle is regularly used for commercial purposes, it should be considered as equipment. You need to “perfect” your security interest to ensure that it is enforceable against third parties..