A workbook for junior finance lawyers · English law
Security & Collateral
A bank lends a family engineering company with 148 staff a £12,000,000 term loan and a £3,000,000 revolving facility; £13,000,000 is drawn on the first day. In return it takes a Debenture — one document giving it security over the factory, the machines, a subsidiary's shares, the unpaid invoices and everything else. You join the Bank's solicitors as a trainee and follow that document from signing to release. By the end you can take each kind of security, register it in time and count what the Bank would get back. One lesson runs through it: an account the Company was left free to use would have cost the Bank £400,000 on the day it mattered.
Chapter 1 is free to read now — what security is (a claim on a thing, not just a promise), what the Bank asked for and what the family refused. The edition unlocks the other nine chapters, the full Debenture and the 30-question exam.
How this workbook works
Plain words first, sections second
Every rule is stated in plain English before its section number appears, in brackets. A floating charge is "security over the things a company keeps buying and selling" before it is clause 3.4. No sentence needs a law degree to read it aloud.
Two sides to every clause
Each clause is introduced as something the Bank asked for and the Company pushed back on, with the objection stated fairly before the words are shown. Security costs money to take and ties a business's hands; the Bank is lending twelve million pounds of other people's money. Neither side is the villain.
Test yourself
Every chapter ends with an 8-question test (pass mark 6). Finish with a 30-question final exam (pass mark 24). Your progress is saved to your Solon Press profile.
The case: one loan, one Debenture
Kettering, Northamptonshire, 24 April 2026. Marlow Precision Engineering Limited is a third-generation family company: 148 staff, revenue of £21,400,000 and net assets of £9,200,000 in 2025. It signs a Facility Agreement and a Debenture with Coldharbour Bank plc. The Bank lends a Term Loan of £12,000,000 for five years, to 30 April 2031, and a Revolving Facility of £3,000,000; on 30 April 2026 the Company draws the whole Term Loan and £1,000,000 of the Revolving Facility, £13,000,000 in all. The money builds a new machining hall for £4,900,000, buys six five-axis machining centres for £3,700,000, and repays £1,900,000 to a financier that had lent against the Company's unpaid invoices. In return the Company charges everything it owns. A legal mortgage covers the factory, valued at £4,200,000 on 12 March 2026. Fixed charges cover the six machines and the 100 shares in its subsidiary, Marlow Tooling Limited. They also cover its book debts — the money customers owe it — and the Collection Account those debts are paid into. Its £9,000,000 insurance policy is assigned to the Bank, and a floating charge catches the rest. Tooling guarantees the loan; the family refuses any personal guarantee.
The charge is filed at Companies House on 5 May 2026, day 11 of the 21 the law allows. HM Land Registry registers the mortgage on 28 May 2026, inside the priority period of 30 business days won by a search on 20 April. Three instalments of £750,000 are paid on time.
Then, on 16 February 2028, the Company's quarterly compliance certificate shows interest cover — profit measured against the interest bill — below the level the Facility Agreement promised. The Bank reserves its rights, then agrees not to act on the breach — a waiver — for a fee of £25,000 and a higher margin. From 16 March 2028 the Collection Account is blocked: nothing leaves it without the Bank's consent. A security review dated 20 March 2028, which you draft, prices the nearly two years the account was left open: had the Bank enforced that month, they would have cost it £400,000. Nobody was appointed, and by 30 September 2028 the Company is back within covenant; the £400,000 was never lost. It is still the price of one account the Bank let the Company keep using.
The full Debenture is on this site: fifteen clauses and five schedules, from the covenant to pay to the forms of notice. Every chapter links straight into its paragraphs.
The modules
Module 1
Why Security
- 01What Security Is For — A promise against a claim on a thing — what the Bank asked for, what the family gave, and the map of the Debenture✓
- 02What the Company Owns, and Who Already Has a Claim — The asset list, the register at Companies House, two stale charges — and a payoff letter that made completion possible✓
Module 2
The Charges
- 03Fixed and Floating — The difference, why a business needs both, what “fixes” — and why a label is not control✓
- 04The Land: A Legal Mortgage — The title, the priority search, the thirty business days — and the day the charge went on the register✓
- 05Shares, Receivables, Accounts and Insurances — A share certificate and a blank form, the Collection Account, the loss payee — what perfects each one✓
Module 3
Making It Stick
- 06Twenty-One Days: Registration and Perfection — Form MR01, day one is the day after, and what “void against a liquidator” means on day twenty-two✓
- 07The Guarantor, the Group and the Negative Pledge — Tooling’s guarantee, the corporate-benefit minute, and the £750,000 of security the Bank agreed to let past✓
Module 4
When Things Go Wrong
- 08The Breach, the Waiver and the Blocked Account — A covenant broken, a reservation of rights, a waiver on terms — and the day the account was blocked✓
- 09Enforcement and the Waterfall — Administrator or receiver, the statutory order, the prescribed part — and £400,000 that turned on one account✓
- 10Release, Priority and the File You Keep — The release at maturity, the deed of priority that was never needed, and the four checklists a junior owns✓
Reference shelf
The Debenture
The complete training document: fifteen clauses and five schedules. The covenant to pay, the four kinds of security, when the floating charge fixes, registration, the promise to give nobody else security, enforcement, receivers, who is paid first, and release. Then the factory, the six machines, the shares, the insurances and the forms of notice.
Glossary
Every term of security law used in this workbook, in plain English, each linked to the paragraph of the Debenture behind it.
Final Exam
Thirty questions across all ten chapters. Pass mark 24. Open book, like real practice.
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