Diagnosis

Your existing lender has refused consent. What that no actually covers.

A refusal from the lender that already holds your debenture feels final, but it is usually a refusal of one specific request: a particular new lender, taking particular security, over particular assets. Work out which clause the no rests on and what the lender is actually protecting, and there are often still ways through. Sometimes the honest answer is that the existing facility has to go.

Tell us what's happening See borrowing with a debenture

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Recognition

You asked, and the bank said no

The usual sequence: a new lender offers something the existing one won't, an invoice finance line, an asset loan or a top-up term loan. It asks for security, or for your existing lender's consent, as a condition. You ask the bank. The bank declines, sometimes with a reason and sometimes without one. The new offer is now stuck, and the question is whether that is the end of it.

First check

Which clause is the no resting on?

There are usually two different restrictions in play, and they rule out different things:

A negative pledge. The company can't grant further security, or can't grant security ranking equally with or ahead of the existing lender, without consent. This bites on the new lender's charge, not on the new borrowing as such.
A restriction on further borrowing. The company can't take on more financial indebtedness above a set level, secured or not. This one can catch an unsecured loan or a hire purchase agreement that a negative pledge alone would not.

For a charge created by an instrument, the particulars filed at Companies House must say whether its terms restrict further security ranking equally with or ahead of it (Companies Act 2006, section 859D(2)(c)). That flag tells you, and every new lender, that a negative pledge exists. It does not tell you what is carved out of it. Many agreements permit some security without consent (a list of "permitted security" or a threshold), so the new facility may already be allowed and the request for consent was a formality you didn't need to lose.

Why lenders refuse

What the existing lender is usually protecting

The asset it actually relies on. The classic clash is receivables. A bank with an all-assets debenture often treats the debtor book as a large part of its real cover. An invoice financier wants the debts assigned or charged to it first. Consent there means the bank giving up the asset it lends against.
Its cover getting thinner. Even where the new lender only wants a second-ranking charge, the bank may think the extra debt makes its own position worse if things go wrong.
What it already thinks of the credit. A refusal can be the first sign that covenant headroom is tighter than you thought, or that the relationship team has doubts it hasn't said out loud. If that's what is going on, see covenant breach before anything else.
An incomplete request. A bank asked to "consent to a new facility" with no detail of what is being charged, how much, or on what priority terms will often say no by default. A request that arrives with the proposed security and a draft deed of priority gets a different answer more often than people expect.

What's still open

Four routes after a refusal

Narrow the ask. Consent limited to one specific asset, a capped amount, or security that ranks behind the bank everywhere is a smaller thing to agree to than "a second lender". Ask the bank what it would agree to, not only whether it agrees.
Offer the ranking in writing. A deed of priority or intercreditor agreement fixes who is paid first from which assets and who can enforce. It is often the thing that turns a no into a yes, because it answers the bank's real question.
Refinance the existing lender out. If the new lender, or a combination of lenders, will take the whole requirement, consent stops mattering because the old security is repaid and released. This has a real cost: exit and break fees, legal fees and the release itself. The facility switch cost estimator adds those up from your own figures, and satisfying a charge covers getting the old one off the register.
Funding that sits outside the restriction. Only once you have read both clauses. Hire purchase on a new asset involves no charge granted by the company, so a negative pledge on its own may not catch it, but a borrowing restriction might. Assume nothing is outside until the wording says so.

Where this goes wrong: treating the refusal as a problem with the new lender and shopping the same request to three more. Each of them will ask for the same consent, and each will see the same restriction flagged in the charge particulars. The work is with the existing lender or with replacing it, not with finding a lender who won't notice.

Decision helper

What the refusal turns out to beUsually the next stepNot this

The new security is already within permitted security in the agreement→Confirm it in writing with the bank and proceed→Abandoning a facility that never needed consent

Bank objects to losing first ranking over one asset, usually debtors→A narrower request plus a deed of priority, or refinance the whole facility→Asking again for the same consent in the same terms

Bank's refusal is really about the credit, not the structure→Deal with covenant headroom and the relationship first→Adding more debt behind a lender that is already nervous

A total refusal, with a sound business and a real requirement→Refinance the existing lender out, costed first→Granting the new security anyway

Limits of this page

Every route above turns on the wording of your own facility agreement and debenture, and on the lender's own policy, neither of which a general page can settle. If the new lender's charge is agreed in principle but still won't go on, the problem is usually mechanical rather than a refusal, and second charge blocked covers where it tends to stick. Established Finance is an introducer, not a lender, and this is information rather than legal advice on your documents.

Talk it through

Need another perspective?

You may already know which facility you think fits. The more valuable question is whether it's actually the right structure for what's happening in the business. We'll review the situation before suggesting possible routes. It costs nothing to have that conversation.

What happens next

A person on our team reads it. No need to know which facility you want first.
If we can help, we may introduce you to a provider and tell you who they are.
No charge and no obligation at any point. You decide whether to go further.

Adam Parker

Founder of Muswell Rose Consulting Ltd, which trades as Established Finance · former Managing Director of Penny, an invoice finance business, working in mortgages, commercial finance and fintech lending since 2010 (career history).

Last reviewed: 25 September 2026

Practical questions

Before you get in touch

Can I take a new facility anyway if my bank refuses consent?

Not safely. If the existing agreement restricts further security or borrowing, going ahead without consent is a breach of that agreement, which is normally an event of default, and a new lender that checks the register will usually see the restriction flagged in the charge particulars before it lends. The workable routes are a narrower request, a priority agreement, refinancing the existing lender out, or funding that genuinely falls outside the restriction.

Is a negative pledge the same as a ban on further borrowing?

No. A negative pledge restricts the company from granting further security. A separate clause, often in the facility agreement rather than the debenture, can restrict further borrowing or financial indebtedness whether or not it is secured. Many agreements contain both, and a refusal can rest on either, so read both before deciding what the no rules out.

Will Companies House show whether my debenture has a negative pledge?

It shows whether one exists, not what it says. For a charge created or evidenced by an instrument, the statement of particulars must state whether any of its terms prohibit or restrict the company from creating further security ranking equally with or ahead of it (Companies Act 2006, section 859D(2)(c)). The actual wording, and any carve-outs, are in the agreement itself.

How long does it take?

It varies by facility, so there isn't one number that fits every case. Some drawdowns against an existing facility complete within a day or two; arranging something new from scratch usually takes longer. We'll give you a realistic timeline once we understand your situation.

What information do I need?

To start, just a description of what’s actually happening in the business. If it progresses, the provider will ask for the usual things: recent accounts, a sense of turnover and trading history, and details of the specific need.