What is a debenture?

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Hi, I have a question relating to debentures. I’ve been advised by an accountant this is something that might be beneficial for my company, but I’d be lying if I said I had a clue what debentures even are. Can someone enlighten me, please?

10 months ago

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A debenture is a long-term loan taken out by a company. The borrowing is secured against the general assets of the business. Most debentures attract a low fixed rate of interest and have to be paid back by a certain date.

If your accountant has suggested a debenture, you need to ask for detailed guidance on the purpose and particulars of the type of debenture he/she is recommending.

10 months ago
 

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