Banks often take security for the loans they advance – doing so gives them some additional protection if a borrower fails to repay the loan when due. Where the borrower is a company, that security can take the form of a mortgage, a security assignment, a pledge, lien, or a charge. In this short article, we explain what a charge is and the differences between a fixed and floating charge.

But firstly, what is a charge?

In the recent case of Signature Living Hotel Limited v Andrei Sulyok Roxana Monica Cocarla [2020] EWHC 257 (Ch), 2020 WL 00929732 the High Court considered whether two deeds of guarantee which failed as deeds (because the formalities for a deed had not been complied with) remained enforceable as a matter of contract.