Short Term Working Capital B11-14b

Identify the different arrangements, which exist for inventory used as security for a loan.

• Floating lien agreement. Lien on all inventory; borrower retains control, and can buy and sell.
• Chattel mortgage agreement. Lien on all inventory; borrower retains controls, and needs approval to sell.
• Field warehouse agreement. Inventory is collateral; remains with borrower, but under third-part control.
• Terminal warehouse agreement. Inventory stored at public facility, and held as collateral.