Types of security interests

The concept of security interests is fundamental to securing repayment in commercial financing. This guidance note explores the various forms of security interests commonly encountered in business transactions, providing authoritative insight into their nature, scope, and regulatory context.

Topics Covered

• What is a security interest?
• Security interests in financing transactions
• Mortgages
• Other security interests
• Guarantees and indemnities

Essential Insights

• Understand how security interests secure obligations against both real and personal property collateral.
• Assess the strategic implications of first and subsequent security interests on priority and enforcement.
• Explore the nuanced distinction between legal and equitable mortgages across different property regimes.
• Recognise the critical role of the Personal Property Securities Act in governing perfection and enforcement.
• Consider how charges, pledges, and liens interact with modern personal property securities frameworks.
• Identify when guarantees and indemnities supplement but do not replace security interests.