10 Apr 2012 19:48:23
I think you are confusing a floating charge with a variable interest mortgage .
Err, no. I'm afraid your explanation is incorrect. A standard security (a scots law term - in England the equivalent is commonly called a mortgage or fixed charge) is a security over land and buildings - e.g. Ibrox, Murray Park, car park etc. A standard security can secure "all sums" borrowed from time to time by the granter of the standard security. A floating charge is a different sort of charge - it "floats" until the security holder enforces it. It can also secure all sums. When the security holder enforces it (crystallises it) the charge brings into the security net all of the then assets of the company (excluding any which are the subject of a prior ranking standard security). A bank will typically take both a standard secutity and a floating charge - the standard security to cover land and buildings, the floating charge to pick up everything else such as moveable property (cash in bank, furniture, equipment etc). Anyone who has a "mortgage" will have granted the bank a standard security not a floating charge.
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