2 min read
Definition
A first charge is the senior security interest registered over an asset. If the asset is sold, the first-charge holder is repaid in full before any lower-ranking charge-holder sees a penny.
In plain terms
It is pole position for repayment. Because the risk is lowest, first-charge lending is usually the cheapest secured money available.
Why it matters for your company
Once your main asset carries a first charge, further borrowing against it must rank behind, which limits and prices it. Understand your registered charges before pledging assets twice.
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