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A Security Agreement creates a legal claim over specific assets when someone borrows money or takes on debt in Nigeria. It lets lenders protect their interests by claiming rights to property like equipment, inventory, or accounts receivable if the borrower fails to repay.

Under Nigerian law, these agreements must clearly identify the secured assets and specify the obligations being secured. Banks and financial institutions regularly use them for business loans, while companies rely on them to access funding without immediately giving up control of their assets. The secured assets serve as collateral, giving lenders confidence to provide financing at better rates.

A Security Agreement becomes essential when lending or borrowing significant assets in Nigeria. Banks need it when offering business loans, while companies use it to secure financing for expansion, equipment purchases, or working capital. It's particularly valuable when dealing with high-value transactions or long-term business relationships.

The agreement proves most useful in scenarios involving valuable collateral like machinery, inventory, or accounts receivable. Nigerian businesses often implement it during mergers, acquisitions, or major equipment financing deals. It offers protection to both parties - lenders get secured interests in specific assets, while borrowers maintain operational control while accessing needed funds.

• Collateral Security Agreement: Basic form covering physical assets as security, commonly used for business loans and equipment financing
• Personal Loan Contract With Collateral: Simplified version for individual borrowers, securing personal assets against smaller loans
• Stock Repurchase Agreement: Specialized form securing company shares as collateral, often used in corporate financing
• Stock Transfer Contract: Focuses on share transfers as security, common in investment-based lending

• Banks and Financial Institutions: Primary users of Security Agreements, they draft and enforce terms as lenders protecting their interests in secured transactions
• Corporate Borrowers: Companies seeking business loans or asset financing, they pledge assets as collateral while maintaining operational control
• Legal Counsel: Draft and review agreements to ensure compliance with Nigerian banking laws and protect client interests
• Business Owners: Small and medium enterprise owners who need financing for expansion or equipment purchases
• Corporate Trustees: Act as security agents in larger transactions, managing collateral on behalf of multiple lenders

• Asset Details: Gather complete descriptions of all collateral, including serial numbers, locations, and current market values
• Party Information: Collect legal names, registration numbers, and contact details for all involved parties
• Loan Terms: Document the exact amount, interest rates, repayment schedule, and default conditions
• Ownership Verification: Obtain proof of ownership and confirm no existing liens on proposed collateral
• Documentation: Use our platform to generate a legally-sound Security Agreement template that automatically includes all required Nigerian legal elements
• Registration Requirements: Prepare necessary documents for registering the security interest with relevant Nigerian authorities

• Party Details: Full legal names, addresses, and registration numbers of both secured party and debtor
• Collateral Description: Clear, specific identification of secured assets, including locations and distinguishing features
• Secured Obligations: Detailed outline of the debt or obligations being secured
• Security Interest: Express creation of the security interest and rights granted to the secured party
• Default Provisions: Specific events of default and enforcement rights
• Governing Law: Clear statement that Nigerian law governs the agreement
• Execution Requirements: Signature blocks, witness provisions, and corporate seal requirements per Nigerian law

A Security Agreement differs significantly from an Asset Purchase Agreement in Nigerian law, though both deal with valuable assets. While Security Agreements create a lender's interest in collateral without transferring ownership, Asset Purchase Agreements facilitate the complete transfer of asset ownership from seller to buyer.

• Purpose and Timing: Security Agreements remain active throughout a loan period, while Asset Purchase Agreements complete a one-time transfer
• Asset Control: Under Security Agreements, borrowers retain possession and use of assets; Asset Purchase Agreements transfer full control to buyers
• Legal Rights: Security Agreements create conditional rights activated by default; Asset Purchase Agreements transfer immediate, absolute ownership
• Payment Structure: Security Agreements secure ongoing loan obligations; Asset Purchase Agreements typically involve direct payment for assets