When a person or business borrows money, or purchases or leases goods on credit (without paying the full purchase price up-front), the credit extended to the borrower (1) may be secured/collateralized by money or other assets, or (2) may be unsecured. For example, if your business takes out a loan from the bank, the bank will likely require you to pledge certain assets as security or collateral for the loan—and if you default on the loan, the bank may use the legal process (attachment, repossession) to gain ownership of those pledged assets to satisfy the debt.

Other transactions in which a creditor extends credit to your business may be unsecured—such as the bank that issues your business credit card without requiring you to pledge specific assets as collateral in case you fail to make the payments. But even an unsecured creditor can file a lawsuit against you or use other means to collect the debt you agreed to repay. The law of secured transactions is generally governed by the uniform commercial code (UCC), which has been adopted and made the law in some form in most states.

In Florida, the law of secured transactions is governed by Article 9 of the Uniform Commercial Code (UCC), which has been adopted into state law. When a business or individual borrows money or obtains goods on credit, the creditor may require collateral to secure the debt. This means that the borrower must pledge assets such as property, equipment, or inventory that the lender can claim in the event of default. Secured transactions are typically documented with a security agreement and a financing statement that is filed to perfect the security interest, giving the lender priority over other creditors. On the other hand, unsecured credit does not involve collateral. Creditors of unsecured debt, like those issuing business credit cards, do not have a claim on specific assets but can still take legal action to collect the debt, such as filing a lawsuit or employing collection agencies. In both secured and unsecured transactions, if the debtor fails to repay the debt, the creditor has various legal means to pursue repayment, including attachment, repossession, or court judgment.