This Statement provides a guide to the characterisation of fixed
and floating charges.
Fixed charges
A fixed charge attaches immediately to the charged asset. The
type of assets that are usually secured under fixed charges are
real property, heavy machinery, intellectual property and goodwill
– assets that are not typically sold by the debtor in the
ordinary course of business.
The most important characteristic of a fixed charge is that,
from inception, it gives the lender control over the charged asset.
Case law has established that without sufficient control by the
lender, a purported fixed charge may in fact be characterised as a
floating charge.
Whether a charge is fixed is a question of both fact and law; it
is not dependent solely on the intention of the parties. A fixed
charge will typically prevent the debtor from disposing of the
charged asset without the lender's consent and will require the
debtor to maintain the asset while it remains in the
