FUTURE-ADVANCE CLAUSE

By SovConn | October 17, 2016

future-advance clause.A contractual term in a security agreement covering additional loaned

amounts on present collateral or collateral to be acquired in the future, regardless of whether the

secured party is obliged to make the advances; esp., a provision in an open-end mortgage or deed

of trust allowing the borrower to borrow additional sums in the future, secured under the same

instrument and by the same security. • This type of clause makes a new security agreement

unnecessary when the secured creditor makes a future loan to the debtor. [Cases: Mortgages 16,

116; Secured Transactions 20, 114. C.J.S. Mortgages §§ 154–156; Secured Transactions §§ 18,

83.][Blacks Law 8th]