Fixed charge: -
A fixed charge is a charged or mortgage secured on particular property, e.g., land building, ship, piece of machinery, share intellectual property such as copyrights, patents, trademarks etc.
In this arrangement the assets is signed over to the creditor and borrower would need the lenders permission to sell it.
Floating charge: -
A floating charge is mortgage on assets that changes in quantity or value from time to time (such as an inventory (, to secure the payment of loan .in this arrangement no charge is registered against the the assets and the owner of the assets can deal in it as usual.
Key Takeaways,
Ø A floating charge is a security interest or lien over a group of non-constant assets, that change in quantity and value.
Ø A floating charge is used as a means to secure a loan for a company.
Ø The assets used in a floating charge are usually short-term current assets that the company consumes within one year.