Under the Uniform Commercial Code, what would happen if Sam tries to secure a real estate loan with furniture store inventory?

Under the Uniform Commercial Code (UCC), certain types of assets can be used as collateral for loans. However, the UCC distinguishes between personal property and real property. Inventory, such as furniture store items, is classified as personal property and is typically not permissible to secure a real estate loan, which is inherently tied to real property (like land or buildings).

In the case of attempting to secure a real estate loan with furniture store inventory, the UCC does not allow personal property inventory to serve as collateral specifically for real estate transactions. Therefore, the attempt to use store inventory as security for a real estate loan would be deemed illegal under these regulations. This underscores the importance of understanding the types of property that can be leveraged in different financing situations, particularly the distinction between real property and personal property as recognized by the UCC.