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Embracing Choice: The Future of Secured Lending in an Ever-Evolving World

  • January 15, 2024

In today’s dynamic world of commerce, where businesses constantly adapt and innovate,
the concept of secured lending has faced challenges that some may consider controversial.
In this article, we explore the evolving landscape of secured lending and the importance of
preserving the freedom to contract.

The Sanctity of Free Will

While many argue for stricter regulations and mandatory control mechanisms in secured
lending, there’s a perspective that upholds the sanctity of free will in contracting.
Proceduralists assert that the fundamental right to enter into agreements, even if they carry
risks, should not be undermined in the name of erasing inequity. Businessmen, they argue,
should be allowed to make their own decisions, whether commendable or not, and live with
the consequences.

The Survival of the Fittest

The world of capitalism operates on the principles of survival of the fittest. When
businessmen opt to forgo proper advice and choose to rely on their own understanding,
they must bear the responsibility for their decisions. In essence, Darwinian principles come
into play, where those who make sound choices thrive, and those who make poor decisions
face the consequences. This self-regulation is the cornerstone upon which commerce
thrives, driving innovation, and propelling economies forward.

The Importance of Certainty

In the event of insolvency, the certainty of agreements between debenture holders and
insolvent entities becomes paramount. These agreements should be the principal
determinants in the insolvency process. This approach emphasizes the importance of
contractual obligations and respects the decisions made by parties when entering into
secured lending agreements.

Preserving Creativity and Innovation

Imposing mandatory control mechanisms, such as standstill periods, can limit the ability of
parties to tailor agreements to their specific needs. It can stifle creativity and innovation,
hindering growth and development in the business world. Allowing parties the freedom to
contract not only fosters a sense of responsibility but also encourages them to explore
innovative solutions to challenges.

In Conclusion

While the debate over the future of secured lending continues, it’s essential to strike a
balance between regulating the industry and preserving the freedom to contract. The
sanctity of free will, coupled with the survival of the fittest and the importance of certainty
in agreements, should guide us in shaping the landscape of secured lending. By embracing
choice and individual responsibility, we can foster an environment where businesses thrive
and innovation flourishes.

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