Our solicitors provide independent legal advice for debentures where lenders require confirmation that a borrower fully understands the legal obligations and risks before entering into the agreement.
A debenture is a form of security used by lenders over a company’s assets to secure borrowing. This may include fixed charges over specific assets such as property or equipment, and floating charges over business assets such as stock, receivables, or cash.
Because a debenture can give lenders extensive rights over a company’s assets, lenders often require the borrower or director to obtain Independent Legal Advice (ILA) to ensure that the terms and implications of the agreement are fully understood before it is signed.
Why Independent Legal Advice Is Required for a Debenture
Lenders require Independent Legal Advice to confirm that the person entering into the debenture understands the legal and financial consequences of granting security over business assets.
A solicitor must ensure that you:
- Understand how fixed and floating charges operate
- Are aware of the lender’s rights over business assets in the event of default
- Understand any restrictions on dealing with company assets
- Are entering into the agreement freely and without pressure
This process ensures that the debenture is entered into with full understanding and reduces the risk of future disputes or challenges.
Once advice has been provided, the solicitor will issue the confirmation or certificate required by the lender before the transaction can proceed.
Our Debenture Independent Legal Advice Service
Our solicitors regularly advise company directors and individuals who are asked to enter into debenture agreements as part of business lending arrangements.
During your appointment, we will:
- Review the debenture and related loan documentation
- Explain the legal obligations and risks in clear terms
- Confirm your understanding of the agreement
- Answer any questions you may have before signing
Appointments are available in person at our office or remotely via secure video call (Zoom). Where transactions are urgent, we may also be able to offer same-day appointments to help avoid delays. Once the advice has been completed, we will issue the solicitor’s confirmation required by your lender.