Terms that should stop the pen

All monies

An all-monies clause says the security — the charge, the guarantee, the assignment — covers not just this facility but everything you ever owe that lender, or that lender's group, now or in the future.

You think you are signing a six-month facility. You are opening a pipe. A later product, a card, an invoice-finance line, a connected company's debt that got pulled in as extra security, can all sit on the same charge and the same house. Refinancing "this one" does not automatically release the security if other liabilities still exist, or if the clause says the security is continuing.

Ask, in writing: "Does this security secure only this facility, or all monies? What has to happen for the charge and the guarantee to be released?" If they cannot answer in a sentence, the answer is all monies.

Additional security on demand

The lender may require further security at any time, and failure to give it is an event of default. On a calm day this looks like boilerplate. On a distressed day it is a lever: they can demand a charge on the house, a pledge of shares, a personal guarantee from a spouse, and treat a refusal as default — accelerating the debt you already cannot pay.

A packager who is doing the job will try to cap this. A warehouse will tell you nobody ever uses it. They use it.

Cross-default

Default under any other agreement — a different lender, a landlord, a finance lease, sometimes even a connected company — is default under this one. One missed Direct Debit elsewhere lets this lender accelerate, sweep, and call the guarantee.

If you already have a stack, cross-default turns a local problem into a simultaneous one. That is the opposite of what a distressed company needs. See Stacked debt.

The personal guarantee that never dies

Look for these words, in any combination:

• continuing — it covers future facilities, not just this one;
• all monies — see above;
• joint and several — they can come for you for 100%, not your "share";
• unconditional / payable on demand — they do not have to pursue the company first, or exhaust security, or wait for a liquidation;
• survives termination / refinancing / variation — replacing the facility does not replace the guarantee unless they expressly release it;
• waiver of defences — you have agreed not to argue the things a guarantor used to be able to argue.

A personal guarantee on a short-term working-capital product is how a company's bad quarter becomes a family's problem. If the security pack also wants a charge on the home, you are no longer discussing working capital. You are discussing whether the business is still a limited company in any sense that matters.

Spouses as "additional guarantors" need their own advice, from someone who is not your company's broker. The box that says they have had independent legal advice is there because lenders have been burned when they did not. Ticking it without the advice is not a shortcut. It is a statement.

Independent legal advice you did not take

The certificate is a weapon against you later. It says you understood. If you tick it without a solicitor, you have signed that you understood. Do not.

A real ILA appointment is a separate adviser, with time to read the document, who is not paid by the broker. If the lender's process is "sign this certificate in the broker's office in ten minutes", that is not independent advice. It is theatre.

Entire agreement and non-reliance

"This document is the entire agreement. You have not relied on any representation." Combined with a call that promised "we'll renew at the same price" or "HMRC will be fine with this", the clause is there to kill the call.

If a promise matters, it goes in the document. If they will not put it in the document, it was not a promise.

Power of attorney and waiver of set-off

A power of attorney lets them sign further security or filings in your name if you "fail to cooperate". Waiver of set-off means you pay them even if they owe you, or even if the product failed to do what was described.

On a distress file, both are how a bad product becomes unarguable in practice. They belong on the list of things you ask a solicitor to mark up, not on the list of things you accept at 16:55.

Assignment of the book, and then some

Invoice finance that takes an assignment of the ledger is a real product. Invoice finance that takes the whole ledger, plus an all-asset charge, plus a continuing personal guarantee, plus a right to notify debtors on day one, plus collections that leave you without a working account, is a different product. It can be the right tool. It can also be how a company loses control of its cash in a week.

Ask: what percentage of the ledger is actually prepayment, what is the reserve, who notifies debtors, and what happens to surplus collections. If the answer is "we take it all and we will see", put the pen down.

Default interest, fees on fees, and the "renewal"

Without quoting a price: default interest sits on top of an already expensive facility. Arrangement fees on a "renewal" are often a new fee on the remaining balance, not a genuine new advance. You can leave the renewal still owing more than you borrowed the first time, having paid collections for months.

If the only exit is a renewal with the same shop, you do not have a facility. You have a subscription to your own debt. Products that finish companies.

Warrants, walking possession, and the enforcement pack

Confession of judgment is more of an American clause. The UK analogue on a commercial file is the enforcement pack you are agreeing to in advance: right to appoint, right to enter, walking possession, recovery agents, costs on an indemnity basis, a jurisdiction clause that is inconvenient on purpose.

You will not litigate your way out of a daily sweep. The work is not to find a clever defence in the small print. The work is not to sign the print.

What to write back

A short email beats a heroic reading at dusk.

"Please confirm, in a reply I can keep: (1) is security all-monies or specific; (2) is the guarantee continuing, and what releases it; (3) is there additional security on demand; (4) is there cross-default to other creditors; (5) list every fee in pounds, including renewal and default; (6) I will not tick an independent-advice certificate without a solicitor. If the offer expires before I have that, let it expire."

If they withdraw the offer because you asked, they have told you what the offer was.

Strata packages. We do not lend. A file with a clean security map — one set of charges, one guarantee, properly disclosed — is exactly the file we build for. If three lenders all think they hold an all-monies claim on the same assets and the same house, that is a harder conversation, often alongside a licensed insolvency practitioner — but the clean file is where we start, and where most of this lesson is aimed at getting you.