Collateral
The property subject to a security interest. UCC Article 9 categorizes collateral by type, with different attachment, perfection, priority, and enforcement rules applicable to each category.
"Collateral" is the property subject to a security interest. UCC Article 9 categorizes collateral by type, with different attachment, perfection, priority, and enforcement rules applicable to each category.
Principal categories
Goods, tangible movable property, subdivided into consumer goods, equipment, farm products, and inventory. Instruments, negotiable instruments and writings evidencing a right to payment of money. Documents, documents of title (warehouse receipts, bills of lading). Chattel paper, records evidencing both a monetary obligation and a security interest in or lease of specific goods. Accounts, rights to payment for goods sold, services rendered, or property licensed. Deposit accounts, accounts maintained with a bank. Investment property, securities, securities accounts, commodity contracts. General intangibles, the residual category, including IP rights, business goodwill, and other intangibles not within other categories.
Description requirements (§ 9.108)
A description of collateral is sufficient if it reasonably identifies the collateral, including by specific listing, category, type defined in the UCC, quantity, computational formula, or any other method that makes the identity objectively determinable. A "supergeneric" description ("all assets" or "all personal property") is sufficient in a financing statement but not in a security agreement, security agreements require more specific identification.
Collateral category determines perfection method, priority rules, and the secured party's enforcement options. Misclassification of collateral is a common error, mislabeling inventory as equipment, treating a deposit account as cash. Each error has downstream priority consequences.