A security agreement consists of a contract between a borrower and a secured lender. Each agreement explicitly specifies which assets are to be used as security and the conditions under which the lender would be allowed to foreclose on that property. Typically, security agreements involve business owners who hope to secure commercial loans. This agreement outlines obligations and rights for both the debtor and the creditor, while also highlighting the form the collateral will take and what will happen if the debtor defaults.
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