Methods used by lenders who advance funds with the borrower's inventory as collateral involve varying amounts of administration, attention, and cost. They do not include:

A) trust receipts or chattel mortgage agreements whereby the inventory is specifically identified by serial number and cannot be sold without the lender's permission.
B) warehousing the collateralized inventory at the lender's facility.
C) a blanket lien granting the lender a collateral position in all of the borrower's inventory, which is physically maintained at the borrower's facility.
D) using public or field warehousing facilities.

Question

Zybrea Knight · Accepted Answer

Final Answer : B, Explanation :  Warehousing the collateralized inventory at the lender's facility is not a method used by lenders because typically, the inventory remains either at the borrower's premises or in third-party warehouses (public or field warehousing facilities), not at the lender's facility.

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