A debenture is a legal document that formalises a lender's charge over some or all of a company's assets. It is one of the most common forms of security used in business lending in the UK. When a lender holds a debenture, they have a registered claim against the company's property that takes priority over unsecured creditors if the business cannot repay.
Fixed and floating charges
A debenture typically combines two types of charge. A fixed charge attaches to specific identified assets — for example, land, property, or machinery — which the company cannot sell without the lender's consent. A floating charge covers a shifting pool of assets such as stock, trade debtors, or cash, and only crystallises into a fixed charge if the company defaults or enters administration.
Registration at Companies House
In England and Wales, a debenture must be registered at Companies House within 21 days of creation, otherwise it is void against a liquidator or creditor. The registration is public, so any prospective lender can check whether a company's assets are already encumbered. This makes a company's debenture register an important part of due diligence when assessing creditworthiness.
Debentures and Credicorp lending
Credicorp's products — the Business Loan, Credicorp Flex, and Credicorp Slice — are structured for UK limited companies and LLPs. The specific security arrangements for any facility are set out in the relevant facility agreement. Where a debenture is taken, it is a company-level charge; there is no requirement for a director personal guarantee.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: What is secured lending for UK businesses?, What is a facility agreement in business finance?.