Senior Secured Debt

Debt that ranks below senior obligations in priority of repayment in the event of the borrower's liquidation or default. Subordinated debt holders are repaid only after senior secured and senior unsecured creditors have been satisfied in full.

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 hybrid lending structure that combines senior and subordinated debt into a single facility with a single blended interest rate, simplifying the capital structure and reducing negotiation complexity. Unitranche facilities are provided by a single lender or lending group and eliminate the need for separate intercreditor agreements between senior and mezzanine lenders.

The implied cost of future rework caused by choosing a faster, easier, or less thorough solution during software development instead of a better approach that would take longer. Technical debt accumulates interest in the form of increased maintenance costs, reduced development velocity, and higher defect rates.

A violation of a financial or operational condition specified in a loan agreement, which may trigger a range of lender remedies including increased interest rates, acceleration of repayment, additional collateral requirements, or declaration of an event of default. Financial covenant breaches most commonly involve failure to maintain minimum debt service coverage ratios, maximum leverage ratios, or minimum net worth requirements.

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.

The filing of a security interest under a Personal Property Securities Act, which is the legal framework governing secured transactions over personal property (including intangible assets) in jurisdictions such as Australia, New Zealand, and Canadian provinces. PPSA registration perfects the security interest, establishes priority against competing claims, and provides public notice of the encumbrance.

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.

Does HSBC lend against intangible assets?

Yes. HSBC UK evaluates intangible assets within its growth-lending programme, with facilities up to £15m, and HSBC Innovation Banking typically takes a first-ranking debenture that captures IP among a company's assets.

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.

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.