It is no secret that in business, money is the sinews of war. Companies will always need financing and capital owners will mostly lend provided that the borrower has collateral of a value exceeding the amount of the loan.
There are several kinds of securities, the best known being the hypothec. The lien can be put against movable or immovable property. Private assets, either tangible (e.g. a house or a vehicle) or intangible (e.g. a distribution license or patent); or a general estate, such as the inventory of a company's finished goods or its trade receivables can all be charged with a hypothec.
The challenge for businesses is to maintain a good balance between the collateral value and the financing obtained. It is important that companies do not concede more collateral to their lenders than necessary. In this way, they will avoid risking their assets or those of their managers for no reason. But they will also retain greater financing capacity, if needed in the future.
On the other hand, sometimes companies and their managers request collateral. In these cases, their challenge will be to ensure that they are scrupulously registered. The slightest oversight could indeed invalidate the hypothec. Companies and their managers should also know in advance how they will be able to exercise the rights they get from the hypothec, if necessary.
In both cases, we can help you make the right decisions.
In this practice area, our team meets your needs in several ways, including: