Types Of Capital - Loan Capital Flashcards
1
Q
Who does it involve?
What is there on this loan?
What is there to payment?
A
Creditors
Interest
Preferential right
2
Q
What are the two advantages?
What is the disadvantage?
A
Interest is tax deductible
No dilution of shareholder control
Interest payable irrespective of profits
3
Q
What are the two types of charges?
A
Fixed and floating
4
Q
Fixed charge
What is it linked to?
What can it not be?
What’s an example?
A
Specific asset
Deal freely
Land or buildings
5
Q
Floating What is it linked to? What can it? What can happen to it? When can the court ignore? What’s an example?
A
Class of assets Deal freely Crystallisation When it’s less than a year old Stock
6
Q
Priority and registration
When must you notify registrar?
Who has priority?
(2)
A
Within 21 days
Fixed over floating and when multiple charges to one asset the first created takes priority
