{"id":174845,"date":"2022-08-22T03:37:01","date_gmt":"2022-08-22T02:37:01","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=174845"},"modified":"2025-07-02T00:40:34","modified_gmt":"2025-07-01T23:40:34","slug":"security-interest-land","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-contracts\/security-interest-land\/","title":{"rendered":"Legal Consequences of Granting a Security Interest in Your Business’ Land in England"},"content":{"rendered":"\n

Running a business will inevitably involve borrowing money, and there can be legal consequences if you grant a security interest over your business’ land. The most common kind of security interest is the mortgage. This article will explain what a security interest entails, your business\u2019 obligation to the lender and the lenders\u2019 rights in the land. <\/span><\/p>\n\n\n\n

What is a Security Interest?<\/span><\/h2>\n\n\n\n

A security interest is a special kind of agreement between a borrower and lender. Often, you will need to provide some kind of security for a loan, such as security over land, property or certain valuable assets. With a <\/span>secured loan<\/span><\/a>, the lender has an entrenched degree of protection. If the borrower defaults on the loan, the lender has certain legal rights to the property (or other asset used as security). Ultimately, secured lending puts the lender in the strongest position. <\/span><\/p>\n\n\n\n

A secured loan is the opposite of an unsecured loan, which is where the lender simply has a claim against the borrower alone. If the borrower defaults, the lender can only pursue the borrower and cannot seek to recover the lost funds through any of the borrower\u2019s property.\u00a0<\/span><\/p>\n\n\n\n

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A borrower almost always grants security as a condition of the loan, but the security agreement exists separately and independently from the\u00a0loan agreement<\/a>.<\/p>\n<\/div>\n\n\n\n

Kinds of Security<\/span><\/h2>\n\n\n\n

Security interests come in different flavours. The law typically distinguishes between four forms of security:<\/span><\/p>\n\n\n\n