Why is AAH asking for security in addition to the bank?
A. If you trade as a limited company and have a loan guarantee, then AAH will usually insist on taking a debenture security over the company, ranking after the one which the bank will hold. A debenture is a security which a company can give over its assets and it ensures that AAH, in common with the bank, ranks as a secured creditor rather than as an unsecured creditor. This is justified on the grounds that AAH has a duty to its shareholders to minimise its risk of potential loss in the future, however small. The other effect is to effectively reduce the risk of loss by a personal guarantor, so it is in your individual interest as well.
