What are materials held for sale or lease considered in secured transactions?

Materials held for sale or lease are classified as inventory in secured transactions. This classification encompasses goods that are part of an entity's regular business operations, specifically those that are held for sale or are in the process of being produced for sale.

Inventory is a crucial category in the context of secured transactions because it represents the items that businesses actively trade or lease. This designation is particularly important for lenders as it influences the priority of their security interests. When financing businesses, creditors often look to inventory because it is a dynamic asset that provides a clear picture of a company's cash flow and operational health.

In contrast, consumer goods refer to items used for personal, family, or household purposes, which do not typically include items held for resale. Equipment generally refers to tools and machinery used for business operations, rather than goods intended for sale. Farm products specifically denote crops or animals in an agricultural context. Thus, among the options given, inventory is distinctly appropriate for materials that a business is prepared to sell or lease.