Security Agreement

Security agreements are contacts between two parties that provide collateral for other agreements, such as loans, by creating a security interest in specific property. Because a security agreement gives another party an interest in your property, the provisions it contains are extremely important and require careful consideration. The terms of a security agreement must also comply with the nuanced provisions of California law in order to ensure that the agreement fully protects the security interest that is created by it. White and Bright, LLP offers a variety of legal services in connection with security agreements — including drafting, reviewing, and negotiating them — to ensure the rights and interests of our clients are protected.

Skillful Counsel to Safeguard Your Interests

Whether you’re starting a business or expanding your company, you may need to obtain a loan to help you meet your objectives. However, if you don’t have an established track record for the product or service you’re offering, a lender may feel more confident doing business with you by entering into a security agreement. This guarantees collateral for the loan, which can come in the form of accounts receivable, business furniture, inventory, business savings accounts, and other types of assets. While some security agreements allow a lender to collect the collateral and retain it until the loan is paid, others allow the lender to sell it immediately.

A well-drafted security agreement should include provisions concerning the following:

  • An accurate and detailed description of the collateral
  • How it will be determined whether the borrower is in default
  • What the lender is permitted to do with the collateral in the event of default
  • A statement that the borrower agrees to take steps to protect the value of the collateral
  • Whether the borrower may accelerate payment of the loan
  • Conditions regarding the borrower’s ability to borrow additional funds from a third-party
  • Representations, warranties, and covenants
  • Rights of the parties and remedies for exercising them

A security agreement can be a critical document to safeguard your business and bottom line — and careful thought should go into each provision. Critically, the terms in security agreements are often highly contested because of the enormous impact they might have on the parties' rights to the property in question. Having a diligent security agreement attorney assist with negotiating the terms in your agreement is key to ensuring that your interests will be adequately protected. At White and Bright, our business attorney team works closely with clients regarding all aspects of security agreements relating to business operations and implements tailored solutions for their corporate needs.

Trusted Business Attorneys to Protect Your Business — Now and in the Future

Security agreements are often complex, and in some cases, they may need to be enforced. If you’re the lender, you may be able to collect from the borrower in the event they default. Other actions a lender may be permitted to take can include repossession and disposition to recoup some of their lost investment. But it’s essential to understand that the conditions under which a lender may collect the collateral must be drafted carefully. In addition, a security agreement that does not specifically describe the collateral will be deemed invalid.

A well-drafted security agreement can help ensure that the parties understand their obligations to each other. It can also be an effective way to avoid litigation. But these documents are typically complicated and require the knowledge of an experienced security agreement attorney — it can be all too easy to inadvertently omit certain terms and provisions. Whether you’re a lender or borrower, the adept business attorneys at White and Bright know what it takes to uphold your financial interests and enforce your legal rights.

Our legal team adheres to the goal of asserting our client's rights and defending their interests for a variety of matters arising out of business transactions and contractual obligations. If you’re a corporate owner, you can be confident in knowing that you have a trusted legal advisor and business partner in White and Bright who will protect your company to the greatest extent possible — both long-term and in the future.

Contact an Experienced California Security Agreement Attorney

Security agreements are a vital part of everyday business transactions. Whether you need a security agreement drafted, reviewed, or negotiated, it’s important to have the counsel of a skillful business attorney. At White and Bright, LLP, our California corporate attorneys have extensive experience representing borrowers and lenders alike, and we have a deep understanding of the multiple perspectives concerning these nuanced matters. Contact us by sending a message on the contact form on this page or by calling us at (760) 747-3200 for a consultation today to learn how we can assist you with your business endeavors.