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LSDefine

Simple English definitions for legal terms

floating lien

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A quick definition of floating lien:

A floating lien is a way for a business to use its inventory or accounts receivable as collateral for a loan. The lender has a general security interest in the assets, even if they change over time. The business can continue to use the assets as long as they make their loan payments. But if they don't, the lender can take the assets or sell them to make up for their losses. If the business goes bankrupt, the floating lien becomes fixed, and the lender may have to fight with other creditors to get their money back.

A more thorough explanation:

A floating lien is a type of security interest that a business can use to obtain loans. It involves using a group of assets, such as inventory or accounts receivable, as collateral. The assets can change in quantity and value over time, but the lien remains in place to assure the creditor that their loan is secured by valuable assets.

For example, a clothing store may use a floating lien to obtain a loan. The inventory of the store changes with the seasons, but the creditor knows that they can always rely on the value of the inventory as collateral for the loan.

However, if the debtor defaults on payments or triggers another event set out in the loan, the floating lien becomes fixed. This means that the assets become fixed, and the debtor can no longer use the collateral. The creditor can then retrieve missed payments or sell the collateral to make up for losses.

It's important to note that floating liens can become complicated for lenders if the debtor files for bankruptcy. At this point, any floating liens become fixed, and the lender must contend with other lenders and the underleveraged state of the debtor. The lender must make sure to petition during the bankruptcy proceedings to recover the collateral, receive some form of compensation, or negotiate a new lien on assets of the business.

floating easement | Florida

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Dkk
19:42
SEO is big money
2016 pushed the conservative party into populism irreversibly
Dkk
19:43
Maybe, but if this is populism, then every election is populist.
19:43
@Dkk: yeah register 1 website and every swinging tom dick and harry calls/emails/texts to 'help with seo'. like bruh, if YOU found it, what i am doing is working
Dkk
19:43
Indeed!
19:48
wasp, i think people are hopeful for a gov who at least attempts to care about the common man
MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
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