The Long-Forgotten Bonded Field Warehouse: Making a Comeback?
Secured Lender, The › Vol. 64 Nbr. 6, November 2008
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Summary
Prior to Uniform Commercial Code (UCC) regulations, a lender had to take possession of collateral in order to perfect its security interest in the collateral. If the collateral was inventory, it was not practical for the lender to hold physical possession of the inventory or have it moved from the borrower's place of business to a terminal warehouse. With the release of the UCC, lenders were able to perfect their interest in collateral without the need to take possession of the collateral. This practice continued through the 1970s and into the 1980s, when a combination of events brought about the decline of the bonded field-warehousing market. Today, most bankers and lenders have forgotten about the availability of bonded-warehouse services. In many cases, the only information banks may be getting on their borrower is a monthly financial statement or possibly a monthly inventory list and/or accounts receivable aging.
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Extract
The Long-Forgotten Bonded Field Warehouse: Making a Comeback?
BY BRUCE LURIE AND RONNIE POPE
Prior to Uniform Commercial Code (UCC) regulations, a lender had to take possession of collateral in order to perfect its security interest in the collateral. If the collateral was inventory, it was not practical for the lender to hold physical possession of the i...See the full content of this document
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