What condition must be satisfied for a security interest to be perfected when a creditor is in possession of collateral?

A security interest is considered perfected when certain conditions are met, and possessing the collateral is one of the key methods of perfection. When a creditor takes possession of the collateral, this action alone serves to perfect the security interest.

Possession indicates a direct control over the collateral by the creditor, which is one of the primary means of perfection under the Uniform Commercial Code (UCC). There is no need for a signed agreement from the debtor, nor is explicit permission or documentation necessary when the creditor is already in possession. The act of possession effectively establishes the creditor's rights against third parties and provides a level of assurance regarding the enforceability of the security interest.

Therefore, simply having possession of the collateral is indeed sufficient to perfect the security interest, emphasizing the importance of physical control in secured transactions.