future advance clause
future-advance clause. A contractual term in a security agreement covering additional loaned amounts on present collateral or collateral to be acquired in the future, regardless of whether the secured party is obliged to make the advances; esp., a provision in an open-end mortgage or deed of trust allowing the borrower to borrow additional sums in the future, secured under the same instrument and by the same security. • This type of clause makes a new security agreement unnecessary when the secured creditor makes a future loan to the debtor. [Cases: Mortgages 16, 116; Secured Transactions 20, 114. C.J.S. Mortgages §§ 154–156; Secured Transactions §§ 18, 83.]
