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Dr AbdelGadir Warsama Ghalib explained in a Gulf Times article that companies are established for several purposes including trading activities and pooling resources while limiting personal liability. As separate legal entities, companies can borrow and obtain loans under their own name for legitimate business needs. This ability often makes it easier for companies to raise funds compared to sole traders despite the latter’s personal liability.
The counsel highlighted the evolution of the floating charge as a highly beneficial type of security that enables companies to grant more effective charges to secure their debts. A floating charge hovers over the company’s assets matching a generic description without impeding the sale of those assets in the normal course of business until it crystallises. This mechanism proves especially useful for firms holding substantial inventory rather than fixed property such as real estate.
According to Ghalib, a fixed charge on fluctuating stock would require lender approval for every transaction, rendering it impractical for ongoing trade. By contrast, the floating charge allows normal business turnover while still providing security that attaches to new or converted assets. The legal expert noted that this form of security is available only to companies and can cover all undertakings and assets both present and future.
A briefing by Al Tamimi & Company on taking security in Qatar confirms that lenders can utilise floating charges over a company’s present and future assets. This legal tool supports broader access to finance in the Gulf by balancing lender protection with borrower flexibility. Such charges often combine with fixed charges on specific property like land to strengthen the overall security package.
S&P Global Ratings reported that Qatari banks held net external debt of approximately $120 billion at the end of 2025, representing about 33 percent of domestic lending. The data illustrates the significant role of corporate borrowing in the country’s financial sector. Floating charges contribute to this ecosystem by facilitating secured lending for business expansion and working capital requirements.
Ghalib added that lenders may require directors to provide personal guarantees in addition to the floating charge, placing them in a stronger position than with individual trader security alone. Corporate guarantees have assumed a larger role than personal ones in securing finance and maintaining cash flow for enterprises. The counsel observed that some businesses convert to company status primarily to take advantage of these borrowing facilities.
In the article titled Companies’ borrowing and floating charges, Ghalib stated that the law explicitly allows companies to secure loans and financial assistance whenever needed. This framework aligns with international practices where floating charges provide liens on fluctuating assets such as inventory and receivables. Investopedia data describes how these charges enable companies to access capital while continuing to use the secured assets in daily operations.
