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Glossary term

Security Agreement

Definition

A security agreement is the contract that pledges specific property as collateral and lays out the lender's rights to it.

Technical definition

A security agreement is a contract granting a lender a security interest in specified collateral, defining the rights and obligations tied to that interest.

Why it matters

It's the document that makes collateral enforceable, so understanding what it covers is important before signing.

Example

A security agreement for a livestock loan would identify the animals pledged as collateral.

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