Glossary

Secured creditor

A secured creditor holds a charge over specific assets, so it ranks near the front of the payment queue and is far more likely to recover its money in an insolvency.

2 min read

Backed by securityA charge on assets

Front of the queueHigh recovery

Definition

A secured creditor holds security — a fixed or floating charge — over company assets, ranking ahead of unsecured creditors in the priority of payments.

In plain terms

Security is what separates being paid in full from being paid pennies if a customer or borrower fails. It is why secured lending is cheaper than unsecured.

Why it matters for your company

As a borrower, offering security lowers your rate but puts assets at risk. As a supplier, tools like retention of title give you a form of protection. See unsecured creditor.