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Debentures and charges, explained.
When a company borrows against its assets, the lender usually takes a debenture and registers a charge at Companies House. This guide explains what a debenture is, how fixed and floating charges differ, how registration works, and why Credicorp lends without any charge over your company at all.
What a debenture is
A document that records a company's debt and the security a lender takes over the company's assets.
In UK practice, a debenture is the document a lender uses to record that a company owes it money and to take security for that debt over the company's assets. It is granted by the company in favour of the lender. The word is sometimes used loosely, but for most directors it means one thing: the lender now has a legal claim over company property if the loan is not repaid.
A debenture typically creates one or more charges. A charge is the security itself — the right that lets the lender look to a particular asset, or to the company's assets generally, to recover what it is owed. If the company defaults, a charge can let the lender appoint an administrator or a receiver and have the charged assets sold to clear the debt. That is a very different position from an unsecured loan, where the lender simply ranks alongside the company's other ordinary creditors.
Security and a personal guarantee are not the same thing. A charge is security over the company's assets. A personal guarantee is a promise by an individual — usually a director — to pay the company's debt personally. The distinction matters, and it is set out in full in personal guarantees explained. Credicorp takes neither.
Fixed and floating charges
The two kinds behave differently, and the difference decides what a company can do with its own assets.
| Fixed charge | Floating charge | |
|---|---|---|
| What it covers | A specific, identified asset — premises, plant, a vehicle | A shifting class of assets — stock, debtors, cash that comes and goes |
| Use of the asset | The company cannot sell it freely without the lender's consent | The company trades with the assets normally until the charge "crystallises" |
| Crystallisation | Not applicable — it is fixed from the start | On default or insolvency, it fixes onto whatever assets are then held |
| Ranking on insolvency | Generally ranks ahead of a floating charge | Ranks behind fixed charges and certain preferential claims |
A fixed charge bites on a named asset. The company cannot dispose of that asset without the lender's agreement, which is why fixed charges are common over property and major equipment. A floating charge hovers over a category of assets that naturally changes — the stock on the shelf, the money owed by customers — and lets the company keep trading until something goes wrong. On default or insolvency the floating charge crystallises, fixing onto whatever assets the company holds at that moment. A debenture often combines both: fixed charges over specific assets, and a floating charge over everything else.
Registration at Companies House
A charge is only fully effective if it is registered — and the register is public.
When a company creates a charge, it must usually be registered at Companies House within 21 days of being created. Registration puts the charge on the public record, so anyone — a supplier, a prospective lender, a buyer of the business — can see that a company's assets are already pledged. If a charge is not registered in time, it can be void against an administrator, a liquidator or another creditor, which would leave the lender unsecured for the very debt it tried to secure.
You can see a company's registered charges yourself on its Companies House record, under the charges tab. Each entry shows the date the charge was created, the lender named as the person entitled, and whether the charge is outstanding or satisfied. A company with several outstanding charges has already promised much of its asset base to existing lenders — something worth checking before it takes on more. Reviewing a company's own filings is part of building business creditworthiness, and the public register is one of the verification steps in how to verify a UK business lender in five minutes.
When a secured loan is repaid in full, the company can apply to mark the charge as satisfied, and the register is updated to show it discharged. Until that happens, the charge stays visible even if the underlying debt has shrunk.
Why it matters to a director
A charge changes what your company controls, what it can offer later, and where a lender stands if things go wrong.
- It limits flexibility. A fixed charge over an asset means you cannot sell or refinance it freely. That can matter if the company's plans change.
- It affects future borrowing. Assets already charged to one lender are not freely available to secure a facility from another. A first lender's charge ranks ahead of a later one.
- It is visible. The charge is on the public record. Counterparties doing their own diligence will see how much of the company is already pledged.
- It changes the order of repayment. On insolvency, secured lenders are repaid from charged assets before ordinary unsecured creditors. A charge moves a lender up the queue.
None of this makes a charge wrong. Security is a normal feature of larger or longer business lending, and it can unlock a bigger or cheaper facility than would otherwise be available. The point is to know what you are granting, over which assets, and where it leaves the company. The broader trade-off is covered in secured versus unsecured business borrowing.
Credicorp's unsecured, no-guarantee model
Credicorp lends to UK limited companies, LLPs and PLCs, and none of its three products takes a debenture, a fixed charge or a floating charge over the company. There is nothing to register at Companies House, because there is no security to register. The agreement is an unsecured promise to repay, between Credicorp Limited and the company.
This follows from how the products are built. The sums are small and short-term — the Business Bridging Loan runs from £50 to £500 over 14 to 84 days, priced at 0.25% per day on the outstanding principal, with a one-off £5 establishment fee and the total cost capped at 100% of the principal. Credicorp Flex and Credicorp Slice work to the same unsecured principle. At that scale, over those terms, taking and registering a charge would add cost and delay without changing the decision, which rests on the company's affordability rather than on assets to fall back on.
So a director borrowing from Credicorp does not pledge company premises, plant, stock or debtors, and does not sign a personal guarantee either. If the company cannot pay, Credicorp ranks as an ordinary unsecured creditor — and the director's own home and savings are never in the picture. The reasoning behind that position is restated on the operator's customer site at credicorp.co.uk.
What to check before granting a charge
If another lender asks for a debenture, these are the questions that matter.
- Fixed, floating, or both? Know which assets are pledged specifically and which are caught by a floating charge.
- What does it cover? A debenture can extend to "all assets and undertaking" — far wider than the asset the loan was meant to fund.
- Does it block future finance? A charge can restrict granting further security, limiting your options later.
- Is a personal guarantee attached as well? Security over company assets and a personal guarantee are separate commitments; a lender may ask for both.
- How is it discharged? Confirm the lender will mark the charge satisfied at Companies House once the debt is cleared.
A short due-diligence routine for any UK business-credit offer, including the security question, is set out in a borrower's due-diligence checklist before taking finance.
Where to go next
- Secured versus unsecured business borrowing — the broader trade-off
- Personal guarantees explained — how a guarantee differs from a charge
- Building business creditworthiness — your own filings and record
- The three Credicorp products — unsecured, no charge, no personal guarantee
- Lending and regulation — why the company is the borrower under Article 60B
- Glossary — plain-English definitions of the terms used here
Apply for an unsecured Business Bridging Loan at credicorp.co.uk →