In extending high-risk credit to individuals or businesses, it is often necessary for the lenders to have some means of protecting themselves from default or bankruptcy on the part of the debtor. One of the mechanisms that can help protect creditors from the effects of bankruptcy or default is the establishment of a security interest.

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• How do you go about creating a security interest?
• Why would you even want to come up with a security interest?
• How do security interests facilitate businesses being able to borrow money?
• Lastly, why is perfection so important in connection with security interests?