Also called: Owned outright, Clear title
Unencumbered asset
An unencumbered asset is one owned outright with no finance or security interest registered against it. It can be sold with clear title or used as security for new borrowing.
What is an unencumbered asset?
An unencumbered asset is one owned outright with no finance or security interest registered against it. It can be sold with clear title or used as security for new borrowing.
Example
Two unencumbered trucks worth a combined $260,000 support a sale and leaseback to release working capital.
Why it matters
Unencumbered plant is one of the few ways a business without property can raise secured funding.