What is a security interest in personal property?

A security interest in personal property involves using any form of personal property or fixture to secure a debt. A borrower signs a promissory note that identifies the personal property that will serve as collateral to secure the loan. Personal property that may serve as collateral includes tangible and intangible assets, commercial paper, and commercial liens.

Tangible Assets – Consumer goods, business equipment, farm products, and inventory.

Commercial Paper – Documents of title, chattel paper, and negotiable instruments.

Intangible Assets – Intellectual property, accounts receivable, and general intangibles.

Floating Liens– After-acquired collateral, future advances on collateral, and proceeds from the sale of collateral.

Note: Security interests in personal property are governed by the state law version of Article 9 of the Uniform Commercial Code. Article 9 does not cover security interests that are not commercial in nature.