Floating lien

A security interest in a group of property that remains in place even after the exact items in that group of property change.  Thus, a business can obtain loans and provide as the collateral a general security interest in its inventory or accounts receivable.  The actual items of property can change over time (e.g., an inventory full of winter boots may become an inventory full of summer sandals), but a floating lien continues to assure the creditor that its loan is secured by valuable assets.

 

Taxonomy upgrade extras: