Manufacturing Assets And Security

When a company receives a loan from a lender, it is common that a lender would require security (also referred to as a charge) over that company's assets.

A lender would often take security in the form of a debenture, which has particular nuances that should be considered in the context of a manufacturer.

What is a debenture?

It is a form of security agreement that grants charges (on a fixed and floating basis) over all of a company's assets.

This can include:

1. A legal mortgage over real estate/property owned by the company;
2. Fixed charges over specific assets, which in a manufacturing context is likely to be particularly relevant in the context of plant and machinery, raw materials and stock; and