REG Secured Transactions · Updated November 2026

Proceeds vs After-Acquired Property in Secured Transactions

After-acquired property is new collateral the debtor obtains; proceeds are value received from existing collateral.

After-acquired property

A security agreement can cover qualifying property the debtor acquires later when the agreement contains an effective clause.

A security interest can continue into identifiable proceeds of collateral, subject to applicable perfection and tracing rules.

New inventory may be after-acquired collateral, while cash from selling existing inventory is proceeds.

Ask whether the debtor obtained a new asset independently or received value because existing collateral was sold or converted.

After-acquired property is new collateral obtained later; proceeds are value derived from existing collateral.

Yes.

Yes, when requirements are met.

No.