Springing Lien

A security interest that gives a lender a claim against all of a borrower's assets, both current and future, rather than specific identified collateral. Blanket liens are commonly used in small business lending and working capital facilities where itemising individual assets would be impractical.

A flexible lending arrangement that allows a borrower to draw down, repay, and redraw funds up to an agreed credit limit over the life of the facility, paying interest only on the amount outstanding plus a commitment fee on the undrawn portion. Revolving credit facilities are the primary source of working capital flexibility for corporate borrowers and are typically secured by a floating charge over the borrower's assets.

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 form of security interest, primarily used in UK and Commonwealth jurisdictions, that attaches to a class of present and future assets of a company (such as stock, receivables, or general business assets) without preventing the company from dealing with those assets in the ordinary course of business. A floating charge 'crystallises' into a fixed charge upon the occurrence of a specified event such as default, appointment of a receiver, or commencement of winding up.

The ratio of net operating income to total debt service obligations (principal plus interest payments) over a given period, measuring a borrower's ability to service its debt from operating cash flow. A DSCR above 1.0x indicates sufficient cash flow to meet debt payments, while lenders typically require a minimum DSCR of 1.2x to 1.5x as a loan covenant.

A short-term financing arrangement designed to fund a company's day-to-day operational needs, bridging the timing gap between paying suppliers and receiving payment from customers. Working capital facilities typically take the form of revolving credit facilities, overdrafts, or invoice finance arrangements, and are secured against current assets such as receivables and inventory.

A security interest granted by a borrower over its intellectual property assets — including patents, trademarks, copyrights, and trade secrets — as collateral for a loan or other financial obligation. IP charges must typically be registered at both the relevant IP registry (such as the UK Intellectual Property Office or USPTO) and the general security interests registry (Companies House, UCC, or PPSA).

The ratio of a loan amount to the appraised value of the underlying collateral, expressed as a percentage. LTV is a primary risk metric used by lenders to assess the adequacy of collateral coverage — a lower LTV indicates greater equity cushion and lower credit risk.

What is the difference between a fixed and floating charge over IP?

A fixed charge attaches to identified IP (for example, a specific patent by number) and ranks highly on insolvency; a floating charge covers a shifting pool of assets and ranks below fixed charges and preferential creditors.

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.

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.