2 min read
Definition
A floating charge is security over assets that change day to day, such as stock and debtors, letting the business trade freely until default. On default it "crystallises", fixing onto the assets held at that moment. It differs from a fixed charge over a specific, unchanging asset.
Why it matters
A floating charge is a form of secured charge over company assets — again, distinct from a personal guarantee on your own assets. See secured vs unsecured.
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