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K. Economy And Productivity Because If The Balance Is Correctly Managed It ...

K. economy and productivity because if the balance is correctly managed it will encourage entrepreneurialism and enterprise.
The social importance of analyzing these issues has become apparent with rising business failure rates in the U.K. Overall there were 18,122 corporate failures last year, an 11% rise from the previous year, which is part of rising interest rates and high energy prices. In an economy, such as currently exists, where there are a large number of corporate failures every year the debt securing and collecting measures become of the utmost importance to the risk attitude of creditors and their willingness to lend. These have counter-productive economic results and this work intends to analyse some of the familiar flaws of the law on security of debt.
.As I have mentioned this work will primarily concentrate on the development, and necessity for, the distinction between fixed and floating charges. The purpose of doing this is to analyse whether such a distinction is necessary and whether or not we could supplant this with the natural antithesis to the current system: freedom of contract. We will then consider some ancillary issues; firstly, the current statistics on returns for unsecured creditors and the implications for a freedom of contract model. Secondly, the impact and relevance of the Small Firms Loan Guarantee Scheme as a way of improving financing opportunities as an alternative to secured lending. We will conclude by analysing the issues and attempting to provide advice for the future reforms of the law in the area. As we mentioned the agenda of this work is not only to analyse but make prospective suggestions about possible ways forward for law reform.
Fixed or Floating
Introduction
The way that the common law has developed fixed and floating securities with the former being undoubtedly superior for numerous reasons, as we shall see, has lead to an antagonism between large creditors, such as banks, who seek to get their securities classified as fixed and the judiciary attempting to maintain some kind of logical separation between the two types. The outcome of this can be very important to small companies because of their general position on the penumbra of access to such finance. If large creditors are unable to adequately secure their debt then they may tend not to take any risks on Small Companies or on the flip side unsecured creditors may try and avoid small companies because of their increased risk.
However, first we will look at the genesis of these two-concepts which find no great support in ancient English- Common Law but had to be judicially created. This work is concerned at looking at the future of small companies and the reason for doing the following review is to extract an answer to whether companies are better off whether there are automatic consequences flowing from the type of security or whether intention of the parties ought to be binding.

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