Recognition
You already have finance, and it's not enough any more
Most finance content explains what a debenture is. Almost none of it answers the practical question an already-funded business actually has: does having one already mean a second facility is off the table?
Why it happens
A debenture is security, not a blanket ban
It means your existing lender holds security over the business's assets, and any new lender will want to know where they'd stand behind that. That's a real constraint to navigate, not an automatic block.
Where this fits
More headroom on top of existing security
Borrowing more with a debenture already in place isn't a separate product. It's usually a further facility arranged around the existing lender's security, which is why this sits within Credit Lines.
Specialist insight
What to actually check
- Does it include a negative pledge? A clause restricting further borrowing without the existing lender's consent. Not every debenture has one, but many do.
- Will the existing lender give consent? If a negative pledge exists, this is the real gatekeeping step, not a formality to skip.
- Is there genuine headroom in the assets? A second lender taking a lower-priority claim needs enough asset value to make that claim meaningful.
Decision helper
What typically fits
Read the agreement itself, not just the Companies House filing. A registered debenture with no negative pledge and plenty of asset headroom is a very different situation from one with a tight negative pledge and thin cover, even though both look identical on the public register.
What this usually leads to
Usually a second facility structured behind the first (a subordinated or second-priority arrangement), or, less often, a negative-pledge waiver from the existing lender for a specific new facility. Which one depends entirely on what's in your agreement, not on a general rule.
Not sure this is the right facility?
Start from the mismatch, not the product
If the business is viable and the shortfall keeps recurring, the useful question is which stage of the cash cycle the money is trapped at, because that decides the facility. See facility mismatch.
