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A debenture is an instrument used by a lender, such as a bank, when providing capital to companies and individuals. It enables the lender to secure loan repayments against the borrower's assets even if they default on the payment. A debenture can grant a fixed charge or a floating charge.

A debenture is an instrument used by a lender, such as a bank, when providing capital to companies and individuals. It enables the lender to secure loan repayments against the borrower's assets even if they default on the payment. A debenture can grant a fixed charge or a floating charge.

A debenture is a type of bond or other debt instrument that is unsecured by collateral. Since debentures have no collateral backing, they must rely on the creditworthiness and reputation of the issuer for support. Both corporations and governments frequently issue debentures to raise capital or funds.

A debenture is a type of loan, but not all loans are debentures.When you take out a mortgage to buy a home or a Commercial Mortgage to buy a factory, the property itself is securing the loan. Business loans are often secured on the borrower's business premises or their home.

Debentures - good or bad? In essence, debentures are a necessary aspect of raising money for a business. Some lenders won't lend above a certain amount without a debenture, so regardless of how much you're looking to borrow, you should be prepared to offer up your assets as security.

The use of debentures can encourage long-term funding to grow a business. It is also cost-effective when compared with other forms of lending. Debentures usually provide a fixed rate of interest for the lender, and this has to be paid before any dividends are issued to shareholders.

Debenture sentence exampleWe are working very closely with our professional advisors, as this consortium requires a floating debenture in order to complete the deal.We therefore accept that any such debenture will also be a security for taper purposes.More items...

A debenture is a legal certificate that says how much money the investor gave (principal), the interest rate to be paid and the schedule of payments. Investors usually receive their principal back when the debenture matures (i.e., at the end of its term).

A debenture is a type of debt instrument that is not backed by any collateral and usually has a term greater than 10 years.

A debenture is a long-term debt instrument issued by corporations and governments to secure fresh funds or capital.Corporate debentures are most commonly used for long-term loans, which have a fixed date for repayment as well as a fixed interest rate.