Solicitors for Drafting Floating Charge & Debenture Agreements

At Mounteney Solicitors, we understand the importance of accurately drafted debentures to secure legal obligations, ensuring compliance with statutory requirements and protecting your interests.

Our services focus on drafting debentures to the agreed specifications of the parties involved and ensuring the seamless registration of the resulting charge at Companies House. While we do not participate in negotiating or agreeing on the underlying terms of the debenture, our expertise ensures the document meets legal standards and is correctly executed for the protection of all parties.

Debentures offer an effective solution to allow funds to be loaned, whilst ensuring that these can be repaid in a timely manner.

For more than 15 years, we have helped lenders to draft Debenture agreements. With our proven track record, we can safeguard your interests and prioritise your financial needs.

We take time to understand your circumstances, and our meticulous approach means that we can be your trusted legal partner to formalise the contract.

If you are a lender planning on drafting a Debenture agreement, get in touch today for professional legal guidance.

What is a Debenture?

A debenture is a legal document used to secure an obligation, typically by creating a charge over a company’s assets. This charge can be fixed, over specific assets, or floating, covering a wider range of assets that may change over time.

Debentures are commonly employed to protect creditors in scenarios such as loans, guarantees, or other financial agreements. By registering the charge at Companies House, the debenture becomes a matter of public record, ensuring transparency and legal recognition.

Our specialist Debenture Solicitors can provide simple, clear advice on the best course of action to protect your finances whilst maintaining business relationships.

What type of security can Debentures offer?

As there are multiple Debenture charges which a lender can use, it is important to gain help from an expert legal advisor. We have years of experiences in drafting and enforcing Debentures so we can find the best type of agreement for your specific circumstances.

Fixed Charge

A debenture will usually place a fixed charge over assets that the borrower would not typically sell. This ensures that your funds are secure, as you can take ownership of specific assets to settle any outstanding balance. The types of assets can vary but include:

• Land
• Property
• Shares
• Intellectual property such as patents
• Machinery

Floating Charge

This type of charge applies to assets that have a variable value. This means that the borrower can continue trading, but the value of the asset will be large enough to act as security for the loan. Types of floating charges can include cash, stock and trade debtors.

Multiple Debentrues

It is possible for multiple debentures to be held against the same borrower. This can align to your financial goals, through holding multiple fixed or floating debentures, or a mixture of both.

Our knowledgeable team have handled many Debenture queries, and we are equipped with the expertise to offer the best solution for your company.

What information should be included in a Debenture?

When drafting a Debenture loan agreement, our dedicated lawyers tailor the content to meet your business needs. This includes the following key components:

• Loan amount and interest rate: this should be clearly stated alongside the payment schedule, such as monthly or quarterly.
• Repayment terms: specify the repayment period, including start and end dates, and any provisions for early repayment or prepayment penalties.
• Loan security: state whether the loan is secured or unsecured. If it is secured, specify what assets are used as collateral, such as property.
• Default clause: outline the conditions which would constitute a breach of contract, and actions that the lender can then take, such as repossession or liquidation.
• Any restrictions that apply: this includes any operational restrictions on the borrower, including selling key assets that are being used as security.
• Lender rights: describe any rights that the lender has to enforce repayment, including steps that can be taken to recover funds.

This should then be signed by both the borrower and lender to ensure it remains valid. Our specialist Debenture solicitors are here to guide you through the process, so get in touch today for legal advice that you can trust.

How do you register a Debenture?

To be able to enforce a Debenture, it needs to be registered with Companies House. This ensures that the agreement is legally recognised. Charges can be filed using the form MR01 at Companies House, and this must be completed 21 days from the date of the contract.

Our experts are here to help with the drafting and registration of your Debenture, giving you reassurance that your funds are recoverable.

What are the Benefits of a Debenture?

A Debenture offers significant benefits to you as the lender. It provides secured interest in the borrower’s assets. Not only this, but the terms of the agreement, such as interest rates and repayment schedules, offer a high level of certainty to the lender. This means that it can be enforced if required. There are also many types of debentures, which allows you to set out the types of charges that are applicable to your needs.

Debentures offer a personal guarantee over the loan whilst enhancing your business relations. For help drafting a Debenture for your loan agreement, get in touch with our efficient team today.

How does a Debenture ensure Security for the Lender?

If the borrower defaults on the loan, our extensive team is here to help with the next steps. This can include the following:

• Default Notice: we can assist in issuing a formal notice to the borrower, informing them that the agreement has been breached, and demanding payment within a timeframe specified.
• Accelerating the loan: if the Debenture contains an acceleration clause, the lender can demand a full repayment of the outstanding loan rather than over the original repayment term.
• Appointing an administrator: in some cases, a lender can appoint an administrator to take ownership of the borrower’s assets to pay any outstanding debt.

The clear terms set out in a Debenture allow a more structured pathway for dealing with defaults. Our experts take time to understand your circumstances and can assist in writing up the terms of the agreement.

At Mounteney Solicitors, we understand the need for certainty over costs.

Your supplier is SRA-regulated Mounteney Solicitors, that charges VAT some customers may be able to reclaim.

We charge £350 + VAT = £420 plus Companies House fee.

There is more about our fees on our website.

If you have any questions, require any further information, or would like to engage us on the T&Cs linked Our Terms in the footer below, please don’t hesitate to Contact Us.

For expert advice around drafting and registering Debentures, contact one of our specialist Debenture solicitors. Our cost-effective and highly efficient approach means that we can complete the process in a timely manner.

We have extensive experience in dealing with complex cases, and our high attention to detail means that we can help to reach the best business solution for you.

From our offices in Bramhall, Cheadle, Hazel Grove and Heald Green, we regularly assist clients around Greater Manchester, including Alderley Edge, Wilmslow and Sale.

For any loan agreement queries, contact one of our Business Solicitors today and we can navigate the Debenture process on your behalf.