Question

1. josue recently opened a new mechanics shop. after he rented a garage, he went to the bank to request funding for the tools he needed. the bank agreed to loan him the money but reserved the right to take the tools if josue defaulted on his loan. what type of interest does the bank have in the loan?

security interest
personal interest
business interest
collateral interest

Explanation:

A security interest gives a creditor (here, the bank) the right to repossess collateral (the tools) if the debtor (Josue) defaults. Personal interest is not a standard legal - financial term in this context. Business interest usually refers to interest charged on business loans but not the right to take assets. Collateral is the asset itself (the tools), not the interest type.

Answer:

security interest