Definition
In this lesson, you'll learn what loan capital is and how it differs from share capital—essential knowledge for advising clients on the best way to fund a business.
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In this lesson
- 0:00 Loan capital: definition and overview
- 0:20 Shares versus loan capital comparison
- 0:43 Fixed and floating charges explained
- 1:48 Debentures and convertible bonds
- 3:00 Directors' powers and debenture regulations
About this lesson
You'll explore the key types of loan capital, including secured and unsecured borrowings, bank overdrafts, and debentures (bonds), and understand the important distinction between convertible and non-convertible bonds. The lesson also covers fixed and floating charges, how floating charges crystallise, the priority of charges, and the statutory requirements for registering debentures under the Companies Act 2006. This is core material for Corporate and Business Law, particularly relevant if you're studying ACCA or CIMA qualifications. Understanding loan capital and its legal framework is crucial for case study scenarios where you need to evaluate financing options and advise on the implications of different borrowing structures. By the end of this lesson, you'll be confident explaining why companies might choose debentures over shares, how security works in practice, and what happens when a floating charge crystallises—all skills you'll need in real advisory situations and in your exams.
Duration: 4m
Transcript
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