This subject area examines the fact that almost all businesses operate on credit to some extent. Most businesses owe debts, and most have accounts receivable (debts owed to them by others). An important distinction is drawnin law and in business practicebetween secured and unsecured credit. Develop your written part around the following questions:

What is meant by "security"?

What is the nature of a conditional sale as compared to a lease?

How are security interests created?

What is a floating charge?

How do the Personal Property Security Acts operate to protect secured creditors?

How are secured creditors' rights enforced?

How do secured interests affect the rights of third parties?

What additional protection is given to banks as secured creditors?