The Various Forms Security Might Take

Every once in a while I like to write an entry that supports Inga’s assertion that I do the boring-desk-work™. This will be one of those entries. That said, if you, like me, get jazzed about the idea of creative ways to keep what’s yours, you might enjoy this entry anyway.

Maybe it was the lackluster economic situation of the past few years, maybe it was our exceptional educational pedigree, stunning creativity and unrelenting good looks, but whatever it was, we have found some really good ways to secure payments and other obligations in the past few years.

Traditionally, security refers to some hard asset that is leveraged in order to borrow money or obtain some credit. A mortgage is secured by the house being mortgaged; a car loan is secured by the car. Simple stuff. But in an age of shrinking credit, this can’t always be the case.

We’ve recently dealt with situations where we’ve negotiated collateral mortgages to secure accounts, conditional sales agreements (where the thing being sold doesn’t belong to the person buying it until the last payment is made) for goods, share pledge agreements for financing, and everything in between.

Some clients feel badly about asking for additional security for their accounts. We always remind them that the security is only executed upon if someone decides not to pay for something they’ve agreed to pay for. The clients are then usually much more receptive to protecting themselves through securitization.

In a less strict sense of the word, we’ve also been helping clients secure their accounts by tightening up their intake and billing processes. We’ve been drafting retainer agreements and intake forms that make sure our clients get the information (and sometimes information is security) they would need in order to collect on a judgment (if it ever came to that) up front – when the relationship is positive and it makes sense to do so. Drivers Licenses and banking information in some cases, personal guarantees that are registered under Ontario’s Personal Property Security Act in others. Whatever the relationship, we’re thinking of some creative ways to secure the payment.

If you have any questions about what we’re doing or what we can do for you, please contact us.

Scott R. Young