A negative pledge is a promise by a borrower not to give security over his assets to someone else. It is a device to protect the position of someone taking credit risk on someone else. A loan agreement is the typical place to find a negative pledge, but it might also be appropriate in other contexts, for example, a vendor who is taking part of his consideration on a deferred basis is taking credit risk on his purchaser. If the vendor has sufficient bargaining power to impose constraints on the purchaser while he is waiting to be paid his deferred consideration, he may ask the purchaser for a negative pledge. This article will consider a loan agreement under which a lender (the original lender) makes advances to a borrower on an unsecured basis.