Intercreditor Lien Carveouts Supporting Supply Chain Finance Borrowing Base Expansion
Intercreditor lien carveouts expand asset-based availability by isolating supplier-financed collateral through structured subordination and reserve caps.
Bill of Lading Title
Meaning
Legal ownership right of goods in transit represented by a document of title issued by a carrier to a shipper. The bill of lading title serves as a receipt for the cargo, a contract of carriage and a document that allows the holder to claim the goods at the destination. It determines who has the legal right to possess the shipment and who bears the risk of loss while the goods are at sea or on the road.
Possession of the original document is generally required to transfer the title to another party.
Transfer Mechanism
Ownership is moved through the endorsement and delivery of the physical or electronic document. When a bill of lading title is issued to order, the shipper can transfer the rights to a bank or a buyer by signing the back of the bill. This allows for the sale of goods while they are still moving through the supply chain.
Collateral Value
Lenders often hold the document as security for the financing provided to the buyer or the seller. Because the bill of lading title grants the right to the physical goods, it provides a tangible form of security that the bank can liquidate if the borrower defaults. The goods remain under the control of the bank until the loan is repaid and the document is released.
Trade Security
Clear documentation of the title prevents disputes over who owns the cargo during a maritime or land transit. If the bill of lading title is not properly managed, the carrier may face legal liability for delivering the goods to the wrong party. Proper handling of the title ensures that the financial transaction and the physical movement of goods remain synchronized.
The document must be presented at the port of discharge to authorize the release of the cargo.