Floating charge

Is a security interest over a fund of changing assets of a company or a limited liability partnership (LLP) which ‘floats’ or ‘hovers’ until the point at which it is converted into a fixed charge, at which point the charge attaches to a specific asset of the company or LLP. This conversion into a fixed charge is called crystallisation and can be triggered by a number of events, including non-payment or the commencement of insolvency proceedings.