That is, the borrower has not put up any collateral or granted any security interest to the lender to secure the repayment of the loan. The lender, in effect, takes only the borrower's promise to repay, based on knowledge of the borrower's creditworthiness and other factors. However, it is often impossible to borrow money unless you can provide some security for the loan. The most common example of a secured loan is the mortgage given by a homeowner when borrowing the money to buy a house. Likewise, an individual or business may grant a security interest in personal property to secure the repayment of the loan.
Corporations can, and do, own personal property.
Some examples of personal property are furniture, photocopiers, tools, equipment, and computers. This has several ramifications. The Security Agreement should be used only with tangible personal property. In other words, the agreement should not be used with real estate, or with intangible items, such as shares of stock. Even if you have a security interest, if it is not properly perfected then the collateral may be lost to another creditor.