A floating charge is a/an

A floating charge is a security, such as a mortgage or a lien, that has an underlying asset or group of assets which is subject to change in quantity and value. When businesses use floating charges, it does not affect their ability to use the underlying asset as normal. Only if the company fails to repay the loan or goes into liquidation does the floating charge become "crystallised" or frozen into a fixed charge and the lender becomes the first-in-line creditor to be able to draw against the underlying asset. A floating charge is a particular type of security, available only to companies. It is an equitable charge on (usually) all the company's assets, both present and future, on terms that the company may deal with the assets in the ordinary course of business. Very occasionally, the charge is over just a class of the company's assets, such as its stock.