What is a Termination Statement?
Termination statements are documents that release the claims that lenders have on the assets pledged by borrowers as collateral in exchange for loans. The termination statement is normally drafted and executed within thirty days after the borrower has paid off the full balance of the loan. A termination statement serves as the official nullification of the previously issued financing statement that established the right of the lender to specific assets of the borrower in the event of a loan default. The use of a termination statement is common in many types of asset-based lending. Often, the collateral or security obligation provided by the borrower is the asset that is acquired with the proceeds from the loan. In exchange for covering the cost of the asset with a loan, the lender places a lien on the asset. The lien remains in effect until the loan is paid in full by or on behalf of the borrower. Once the loan is paid in full, the lender is required in many cases to file the terminati
” Termination statements are documents that release the claims that lenders have on the assets pledged by borrowers as collateral in exchange for loans. The termination statement is normally drafted and executed within thirty days after the borrower has paid off the full balance of the loan. A termination statement serves as the official nullification of the previously issued financing statement that established the right of the lender to specific assets of the borrower in the event of a loan default. . The use of a termination statement is common in many types of asset-based lending.
