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Legal Counsel, PA employs a security agreement lawyer in Orlando, Florida who can help you if you are a small business or investor considering making a loan. A security agreement is an agreement that protects a lender in the event that a borrower defaults on a loan. The protection is collateral a borrower offers when borrowing money. Small businesses may offer collateral when seeking loans. The security agreement is the legal contract that allows the lender to enforce the contract should the borrower default on the loan, and it specifies the assets and property the lender has a right to seize.
Collateral can be a home, real estate, a car, furniture, fixtures, equipment or other asset. If you are a private lender and want to issue a security agreement to protect your investment, you may also need to have additional documents in place, such as a UCC-1 filing. In order for a security agreement to be enforceable, it must be properly written, signed, and notarized. It is important that both parties understand their rights and obligations as written into the security agreement. Legal Counsel, PA employs a security agreements lawyer in Orlando, Florida who can help you with your security agreement. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.
Security Agreements and Promissory Notes: What’s the Difference?
A promissory note is essentially a formal “IOU.” It clearly outlines the amount of money borrowed, the parties involved (the lender and the borrower), the interest rate, the repayment plan, and consequences of non-payment. Promissory notes can be either secured or unsecured. Collateral is any property or asset that a lender can take if the borrower cannot repay the loan. A security agreement is the contract that protects a promissory note with collateral. The security agreement might describe the property or assets put up for collateral and will detail whether the lender can hold the collateral or how the lender can seize the collateral should non-payment occur. Another type of security instrument is UCC-1. A UCC-1 is filed with the Florida UCC. A UCC-1 issues a public notice that there is a lien on the debtor’s collateral or property. Security agreements are different from promissory notes. If you are a private lender issuing a private loan, you may need a promissory note and a security agreement if you plan to require collateral. However, if you do not require collateral, you may not need a security agreement, but should still have a promissory note in place. Legal Counsel, PA employs a security agreement lawyer in Orlando, Florida who can help you draft a sound and enforceable security agreement and help you understand what steps you need to take as a private lender to protect yourself if you are lending money in Orlando. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.
Security Agreements: Do You Need One?
Are you making a loan to a family member to help them launch their small business? Are you issuing a loan to a colleague to help him or her launch a start-up? If you are lending money to another party, it is important to protect your investment, especially if you want your money paid back. One way that you can protect your investment is by issuing a promissory note along with a security agreement. For example, if you are lending a friend money to buy real estate, you may secure the loan with a mortgage on the borrower’s real estate. If you are lending a friend money to buy equipment to start his or her business, you may secure the loan with the equipment itself. The security instrument doesn’t have to involve property purchased using the loan. It can be a car, a home, or other item of value that the borrower already owns that can serve as collateral for the loan. Having a security agreement in place makes it easier for you to recover losses if the loan is not repaid. It protects your investment. If you are thinking of lending money to a business partner, friend, or family member, or are a private lender thinking of making a loan, Legal Counsel, PA employs a security agreement lawyer who may be able to help you in Orlando, Florida. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.
What Should Be Included in a Security Agreement?
A security agreement should include the names and contact information of the lender and the borrower. It should describe the loan that the collateral encumbered by security agreement. The security agreement should clearly describe the property secured under the instrument, and offer a “grant of security” in the property. The security agreement should clearly outline the rights that the lender has should the borrower default on the loan. It should also clearly state that the security in the property in question will end when the loan is repaid. Other legal boilerplate language might also be included in a security agreement, such as information about applicable local law, and where correspondence to each party should be sent, attorney’s fees, etf. If you need help with a security agreement, reach out to Legal Counsel, PA, a law firm that employs a security agreement lawyer in Orlando, Florida. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.