after-acquired clause - Business Definition
The American Heritage® Dictionary of Business Terms Copyright © 2010 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.
- In mortgage lending, a clause specifying that property acquired by the borrower following the signing of the mortgage will be included as collateral in the lien. The clause improves the quality of the lender's claim.
- In asset-based lending, a clause specifying that additional receivables and inventories acquired by the borrower will be included as collateral for the loan agreement. An after-acquired clause is a particularly important component of loans backed by current assets that are continually replaced during the normal course of business.
after-acquired clause - Investment & Finance Definition
A paragraph found in a mortgage that says that any additional mortgages acquired after the first mortgage is obtained will be additional collateral for the first mortgage.