Security

How security works

Security can take different forms, including mortgages and fixed or floating charges. Its practical value depends on title, documentation, enforceability, prior claims and the asset’s realisable value.

Practical UK business example

A company offers machinery as security. The lender checks whether another finance provider owns it or already holds a charge before considering its value.

Illustrative example only; not a finance quotation or a client case study.

Why it matters

It explains why a lender may require legal work or valuation and why funding can restrict dealings with particular assets.

Limitations and common misconceptions

A personal guarantee and asset security are not interchangeable, although both can support a facility. Providing security does not eliminate the repayment obligation or guarantee approval.

Discuss business borrowing to discuss how the structure relates to your business.