Floating Charge
/ˈfloʊtɪŋ ˈʧɑrdʒ/
Definitions
- (n.) A security interest over a fund of changing assets of a company which 'floats' until crystallization, when it becomes fixed.
The lender took a floating charge over the company’s inventory and receivables.
Forms
- floating charge
Related terms
See also
Commentary
A floating charge is often used in corporate finance to secure general assets that fluctuate in the ordinary course of business until an event causes it to crystallize into a fixed charge.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.