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Fixed and Floating Charge

Discussion in 'General Investing Discussion' started by lapsapfler, 30th Apr, 2012.

  1. lapsapfler

    lapsapfler New Member

    3rd Mar, 2012
    Perth, WA
    Hi all,

    InvestEd newbie here, so hopefully this isn't a dumb question..

    I work in Property Finance in one of the banks..when we fund a property investment (say an industrial lot), we will take a mortgage over the property as security..

    but, we also take a Fixed and Floating Charge (FFC) over the related company A i.e. the owner of the property asset as per the Certificate of title..

    Why is this so? Doesn't the mortgage already cover the property? Why not take just a mortgage, or just a FFC over company A?

    PS: I know the Personal Property Securities Act (PPSA) has already been implemented, so technically this question is outdated, but I would just like to know as this will lead to more queries in regards to the PPSA
  2. MikeF

    MikeF Member

    1st Feb, 2008
    Sydney, NSW
    A fixed and floating charge gives you more control as the charge would cover other assets of the company such as cash, plant & equipment as well as sale & option agreements which may be of value and relate to the land.

    It also allows you as a lender to appoint a receiver who can also consider issues such as insolvent trading as well as the payment of preferential payments.