Article 9 — Secured Transactions · Section 9-313
An overview and analysis of UCC § 9-313 regarding the creation of a security interest in goods.
Source: U.C.C. § 9-313
A security interest in goods is perfected by filing a financing statement or, in the case of goods that are not inventory, by the secured party taking possession of the goods.
UCC § 9-313 outlines how a security interest in tangible goods can be established and protected through perfection, primarily by filing a financing statement or by actual possession of the goods. This section is key in understanding how creditors can secure their interests in personal property.
An interest in personal property or fixtures that secures payment or performance of an obligation.
The legal process that establishes the validity of a secured party's interest against third parties.
A document filed to give public notice of a secured party's interest in collateral.
Example 1
A bank loans $50,000 to a business and takes a security interest in its delivery truck. The bank can perfect this interest by either filing a financing statement or by taking possession of the truck.
Example 2
A furniture supplier sells inventory to a retailer with a $30,000 financing arrangement, retaining a security interest in the inventory until fully paid. The supplier must file a financing statement to protect its interest against other creditors.