Statutory Retention of Title Enforcement under Administration Stays
Administration stays freeze inventory repossession immediately, forcing suppliers to establish specific stock identity and contract incorporation to claim proceeds.
All Moneys Clause
Meaning
Security provisions in lending agreements extend the reach of collateral to cover every liability an entity owes to a specific creditor. The use of an all moneys clause ensures that a factory building or heavy machinery charged to a bank secures not just the initial acquisition loan but also subsequent working capital lines or overdrafts. These provisions remove the need to execute new security documents for every increase in debt.
Debt Coverage
Expansion of debt coverage occurs when a factory building or heavy machinery charged to a bank secures more than just the initial loan. An all moneys clause ensures that the bank remains secured even as the composition of the debt changes. These ensure that the lender maintains a priority position over the assets until every obligation is satisfied.
Collateral Retention
Releasing a specific piece of equipment from a charge becomes difficult when the mortgage document links it to every debt on the books. Even if the original purchase price of a milling machine is paid off, the all moneys clause keeps the machine encumbered as long as any other loan facility remains active.
Facility Expansion
Lending capability increases for the manufacturer because the bank holds a broad security interest that adapts as new production cycles require more cash. When a supplier’s forecast suggests a need for more inventory, the bank can provide funds more quickly because the existing security already covers the new advance. This structure reduces the cost of calling for extra capital compared to drafting new security documents for every seasonal fluctuation in production volume.
The demonstrated rate of lending increases as the administrative burden of securing individual runs decreases.