What is FLOATING LIEN?

A general CLAIM against a group of ASSETS rather than a specific asset, i.e., a pool of current and future ACCOUNTS RECEIVABLE or INVENTORIES rather than designated receivables or inventories. A BANK granting a LOAN may choose to use the floating lien to secure its exposure, particularly if the tenor of the loan exceeds the average maturity of the assets being financed. Also known as FLOATING CHARGE. See also SECURITY INTEREST.

More On This Topic



Link to This Definition
Did you find this definition of FLOATING LIEN helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary