In field warehousing, the financecompany(usually a specialized warehousing organization) takes over the use of a certain part of the borrower’s premises. This floor space must be segregated from the borrower’s other operations so that it can be kept locked, restricting access only to the warehousing company. The inventory to serve as collateral is transferred to this segregated area, and the warehousing company advances the discounted cash value of the inventory to the borrower. In return, the warehousing company receives a warehouse receipt, which gives its title to the inventory. This inventory cannot be sold or used without the warehouse company’s permission, and this permission is given only when the borrower repays a corresponding portion of the funds advanced. Thus, the lender can ensure that the collateral always is adequate to secure the loan. The warehousing company locates a member of its own staff, the custodian, on the borrower’s premises to ensure that its rights are respected.