Security and personal liability 

Regardless of the type of debt finance you choose, lenders will need to secure collateral on the money you are borrowing.

This gives them an insurance that should you be unable to repay the loan, they have alternative ways of getting their money back.

Lenders may take the security against assets held by the business, or against the business owner(s)’ individual assets. 

Below, we’ve broken down the different approaches to personal liability in more detail: 

Fixed and floating charge 

A charge is an asset pledged to guarantee the repayment of a loan. This gives a lender the legal right to access the pledged asset and take possession if the business goes into liquidation. 

Personal guarantees 

A personal guarantee is a type of collateral secured against the personal assets of individual business owner(s). Most lenders demand this sort of guarantee, often in addition to a fixed or floating charge.  

Joint and several liability 

'Joint and several liability' is a term used in loan agreements involving  two or more borrowers. It gives lenders the freedom to claim the full loan balance from the signatories as a group or from each of them individually.  


A debenture is a corporate bond backed by the borrower's specific assets. It’s a written, signed, unconditional, and unsecured promise by one party to another committing the maker to pay a specified sum. The lender may require the sum on demand, on a fixed date or on a determinable date.