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Debentures explained:
what they are and what they mean.
When a bank gives a company a loan, it often registers a debenture — a charge over the company's assets — at Companies House. This guide explains what that means in plain English, what Credicorp does, and what the director needs to know.
What is a debenture?
A debenture is a legal document, registered at Companies House, that creates a charge over a company's assets in favour of a lender. Think of it as a security interest: the company keeps using its assets normally, but the lender has a registered right to those assets if the company defaults and cannot repay.
A debenture does not mean the lender owns the company's assets. The company continues to operate exactly as before. The charge simply gives the lender a priority claim over those assets in an insolvency or enforcement scenario.
Debentures are most commonly used by banks when lending to businesses. They are registered at Companies House within 21 days and become publicly visible on the company's filing record — any other lender, supplier or potential investor can see them.
Fixed charge vs floating charge
Most debentures contain two types of charge:
- Fixed charge. Attached to specific, identified assets — typically property, specific equipment, or a designated bank account. The company cannot sell or dispose of these assets without the lender's prior consent while the charge is in place. Fixed charges take priority in any recovery.
- Floating charge. Covers a class of assets that changes over time — typically the general pool of company assets, stock, and debtors. The charge "floats" over these assets as they change during normal trading. If the company defaults, the floating charge "crystallises" and becomes fixed to whatever assets are present at that moment.
A bank debenture typically contains both: a fixed charge over specific identified assets (if any) and a floating charge over the general company asset pool. This maximises the lender's security position.
Does Credicorp take a debenture?
The exact security position for each Credicorp product is set out in the loan documentation at credicorp.co.uk. This site is the brand front door and does not take applications or publish the current terms — check them there.
What is always true across all Credicorp products:
- No personal guarantee. Credicorp lends to the company. No director signs a personal guarantee. No director's personal assets — home, savings, personal accounts — are involved.
- No charge over personal property. Even if Credicorp registers a charge at the company level, it does not extend to any director's personal estate. The security, if any, is at the company.
If the company has existing charges from a bank or other lender — visible at Companies House — these may affect what a new lender can take as security. Credicorp's assessment will take the company's existing charge position into account.
The negative pledge — what it restricts
Many bank debentures contain a negative pledge: a clause in which the company promises not to create additional security interests over its assets without the first lender's consent. This means:
- The company cannot grant another lender a fixed or floating charge over its assets without asking the bank first.
- An unsecured lender — one that does not register a charge — is typically not restricted by the negative pledge, because it is not taking a competing security interest.
- The restriction is between the company and the first lender, not something a subsequent lender can see written on the face of the Companies House filing — you have to read the filed charge document.
If the company has a bank debenture with a negative pledge, check before applying for additional secured finance. The loan documentation at credicorp.co.uk will make clear whether Credicorp's security position would be affected by an existing negative pledge.
How to check the company's charges register
- Search at Companies House. Go to find-and-update.company-information.service.gov.uk and search for the company by name or number. Under "Filing history" or the "Charges" tab, you can see all registered charges — who holds them, when registered, and whether satisfied.
- Read the charge document. Each charge is a filed document you can view for free. It shows which assets are covered (fixed charge items, floating charge description), any negative pledge, and other conditions. This tells you exactly what the existing lender holds and what restrictions apply.
- Distinguish satisfied from outstanding charges. A satisfied charge (marked "Satisfied" at Companies House) has been released — it no longer binds the company. Only live, outstanding charges are active restrictions. Old satisfied charges are historical records only.
- Apply with the company's security position clear. Knowing what charges exist, whether they are satisfied, and whether any contain negative pledges puts you in the best position before applying. Apply at credicorp.co.uk — this site is the brand front door and does not take applications.
Debenture questions
What is a debenture?
A debenture is a legal document that creates a charge over a company's assets in favour of a lender. It is registered at Companies House and becomes publicly visible on the company's filing record. A debenture does not transfer ownership of the assets to the lender — the company keeps using them normally. It creates a security interest: if the company defaults and cannot repay, the lender may be able to enforce the charge and recover what is owed from those assets. In practice, debentures are most commonly used by banks for business loans.
What is the difference between a fixed charge and a floating charge?
A fixed charge attaches to specific, identified assets — a property, a piece of equipment, a specific bank account. The company cannot sell or dispose of those assets without the lender's consent while the charge is in place. A floating charge covers a class of assets that change over time — typically the company's general assets, stock, and debtors. It "floats" over those assets as they change until it crystallises (usually on default or insolvency), at which point it becomes fixed to whatever assets are present at that moment. Most bank debentures contain both a fixed charge over identified assets and a floating charge over the general asset pool.
Does Credicorp take a debenture when it lends?
This is confirmed at the point of application and in the loan agreement at credicorp.co.uk — check the current terms there. What is always true: Credicorp does not require a personal guarantee from the director, and does not take a charge over any director's personal property (home or otherwise). The lending is to the company, the security (if any) is at the company level, and no personal assets of any director are involved.
Will a debenture stop the company from getting other finance?
A registered debenture is visible to any lender who searches the company at Companies House. If the debenture contains a negative pledge (a clause preventing the company from taking on additional secured borrowing without the first lender's consent), this can restrict further secured lending. An unsecured lender is not subject to the negative pledge. The practical effect on subsequent borrowing depends on the terms of the specific debenture. Always check the loan documentation.
What happens to a debenture when the loan is repaid?
Once the loan is repaid in full and the credit facility is closed, the lender should register a Satisfaction of Charge at Companies House, removing the charge from the public record. This confirms the security has been released. If you are checking a company's credit history, satisfied charges are visible on the Companies House filing record alongside the original registration — they show the charge existed and was subsequently cleared.
Related guides
For the "no personal guarantee" position in detail, read no personal guarantee — what it means. For what a business loan agreement covers, read what a business loan agreement covers. For the "no charge over your home" position specifically, read what no charge over your home means. All the guides are on the Learn hub.
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