Corporate Borrowing

What you need to know about the Moveable Transactions Act:

The Moveable Transactions (Scotland) Act 2023 (the “MTSA”) came into force on 1 April 2025 and made fundamental, and very positive changes to the commercial landscape in Scotland.  

The MTSA modernised the law relating to the creation of security over contractual rights and created a new security right (the statutory pledge) that can be used to secure moveable assets.

What changed?

The MTSA changed how companies create security over their Scottish assets. It is now easier to use valuable contractual rights, such as the right to receive rental income, as security for borrowings. It is also now possible for companies to create a new type of security called a statutory pledge over their moveable assets in Scotland, such as plant and machinery and vehicles. Previously, the only way to create security over these types of assets was to transfer possession of them to a lender or grant a floating charge.

For companies that own intellectual property (“IP”), it is also now possible to grant a statutory pledge over that IP. This allows fixed security to be created over IP in Scotland without having to transfer title to the IP to a lender which is a significant and positive change.

It is also now possible to grant a statutory pledge over shares and other financial instruments without the having to transfer title to the shares to a lender. .  Read our update here on the UK Parliamentary Order that has introduced this change.  This is a very welcome development to Scots law as the previous requirement to take title to the shares made security over shares in Scottish companies unattractive to many lenders.

How does the MTSA impact on corporate borrowing?

Corporate borrowers should find it easier to raise finance against, and grant security over, their moveable assets, such as contractual rights (including receivables and invoices), claims, IP, shares, vehicles and equipment. The typical security package taken by a lender has changed and we are seeing statutory pledges being granted by corporate borrowers. 

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