Essay: Securities Required for Loan

Sample Essay

The loan application for Debenhams is reviewed with a condition that the company will provide some assets or securities for mortgage or pledge as a safety precaution to the loan and these assets or securities will be kept with the financing institution until the whole amount of loan has been paid off. In case of securities the financial institution will gradually decrease the number of securities held with yearly payment of the loan.

The clauses of loan agreement with Debenhams allow the financing institution to sell of the assets or securities in case of default by the company and pursue any litigation against Debenhams for damage claims. The securities required for the loan will have a market value of 80 percent of the total amount of the loan which is £80 million at the time of debt agreement.

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