What does the term "equipment" refer to in secured property?

The term "equipment" in the context of secured property specifically refers to goods or machinery that are utilized in the operation of a business. This definition encompasses items that are necessary for the day-to-day functions of a business rather than consumables or products that are intended for immediate sale.

Equipment typically includes machinery, tools, and other assets that enable a business to manufacture products or provide services. These assets are usually vital for production processes, making them distinct from raw materials, which are inputs used to create finished products, or office supplies, which do not contribute directly to the manufacturing or operational processes. Furthermore, products intended for sale are the final output of a business and are classified separately from equipment necessary for their production. Consequently, understanding equipment within the framework of secured transactions is essential for assessing collateral in financing agreements.