Fixed Charge

A security document commonly used in UK lending that creates a combination of fixed and floating charges over all or substantially all of a company's assets in favour of a lender. A debenture typically grants fixed charges over specific high-value assets (property, key IP) and a floating charge over the company's remaining assets and undertaking.

A loan with a specified repayment schedule and maturity date, drawn in full at inception (or in agreed instalments) and repaid through regular principal and interest payments over its term. Term loans may be amortising (with regular principal repayments) or bullet (with principal repaid in full at maturity).

A form of debt financing available to venture-backed startups that supplements equity financing without requiring the dilution of additional equity rounds. Venture debt is typically structured as term loans with warrants giving the lender the right to purchase equity, and is used to extend runway, finance equipment, or bridge between funding rounds.

A provision in a loan agreement that triggers a default under the agreement if the borrower defaults on any other debt obligation, even if the borrower is current on the loan containing the cross-default clause. Cross-default clauses protect lenders by ensuring they are immediately informed and can take action when a borrower's creditworthiness deteriorates, preventing other creditors from gaining preferential treatment.

Debt subordination is an agreement under which one creditor's claim is ranked behind another's, so the senior lender is repaid in full before the subordinated lender receives anything. In IP-backed lending it is the mechanism that lets more than one lender share the same intangible collateral, or that reconciles a new IP-backed facility with existing security.

A loan-loss provision is an amount a lender sets aside to cover the losses it expects to incur on a loan or portfolio, reflecting the probability of default and the loss it would suffer after recoveries. The size of a loan-loss provision is driven directly by the recovery a lender can realistically expect from its collateral, which is why IP-backed facilities are provisioned conservatively.

A hybrid form of financing that sits between senior debt and equity in the capital structure, typically unsecured or subordinated to senior lenders. Mezzanine debt carries higher interest rates than senior debt (often 12-20%) and frequently includes equity kickers such as warrants or conversion rights.

A public notice filed under the Uniform Commercial Code (primarily UCC-1 financing statements) that establishes a creditor's security interest in a debtor's personal property, including intangible assets such as intellectual property, receivables, and general intangibles. Filing a UCC-1 statement perfects the security interest and establishes priority over subsequent creditors.

What happens to my IP if I default on an IP-backed loan?

On default the lender enforces its registered security, which can mean selling, licensing or assigning the charged IP to recover the debt. How far it can go depends on the charge type and its priority ranking.

Does HSBC lend against intangible assets?

Yes, as part of a wider facility. HSBC UK evaluates intangible assets within its Growth Lending (launched 2022, £350m since December 2023) but has published no IP loan size or advance rate.

How do I register a charge over IP at Companies House?

File form MR01 with a certified copy of the charge instrument at Companies House within 21 days of creation, or the charge is void against a liquidator or administrator. Also record it at the UK IPO.