One Vehicle + Two Loans = Confusion

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Question:

A customer owns two separate businesses, each of which has a small line of credit. The collateral securing these lines of credit is a personal vehicle that the customer owns. The car is titled in one of the business names so how and where do I reflect that the second business also has a loan on that vehicle? As of today the title only reflects the first business as the owner and only one line of credit.

Answer:

This may be a state issue since you are asking how to reflect it on the title. In our state the only thing showing on the title would be the bank's name as the lien holder. Our loan documents and security agreements for each loan would reflect the security interest in the vehicle.

First published on BankersOnline.com 2/19/07