Taking security over receivables
Taking security over receivables

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Taking security over receivables
  • Nature of receivables
  • Types of security interest used for receivables
  • Assignment by way of security
  • Charge
  • Assignment by way of security or assignment by way of charge only?
  • Taking security over receivables by way of fixed security
  • Fixed security—exercising control over the receivables
  • Taking security over receivables by way of floating security
  • Prohibitions or restrictions on assignments by way of security
  • More...

Taking security over receivables

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for lending lawyers? [Archived].

In commercial lending transactions receivables are typically offered as security:

  1. as part of a package of security over the whole of a company's assets (see Practice Note: Key features of debentures), and

  2. in transactions where a steady stream of receivables forms a major part of the borrower's assets and the lender wants to control that income stream (for example, where the borrower is a company which provides goods and services to third parties)

This Practice Note explains the key issues which arise when taking security over receivables.

For information on taking security over other types of intangible assets see Practice Notes:

  1. Taking security over contractual rights

  2. Taking security over insurance policies, and

  3. Taking security over intellectual property rights

Nature of receivables

In broad terms, a receivable is the right to receive the payment of money which is enforceable by legal

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