negative pledge

noun

A type of loan or loan condition in which the borrower agrees with the lender not to allow any other lender or creditor to rank ahead for payment in the event of a liquidation. Such a loan is unsecured (ie. not backed by a charge over specific assets).

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Meanings

nounnegative pledge (plural negative pledges)

plural negative pledges

  1. businessA type of loan or loan condition in which the borrower agrees with the lender not to allow any other lender or creditor to rank ahead for payment in the event of a liquidation. Such a loan is unsecured (ie. not backed by a charge over specific assets).

Origin

The idea (and hence presumably the name) developed in the United States, and then went global. (Reference: Trevor Sykes, The Bold Riders, second edition, 1996, →ISBN, page 8.)

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Cite this entry
APA

negative pledge. (n.d.). In WatkinsX Dictionary. Retrieved November 4, 2026, from https://dictionary.watkinsx.com/word/negative%20pledge

MLA

“negative pledge.” WatkinsX Dictionary, https://dictionary.watkinsx.com/word/negative%20pledge. Accessed November 4, 2026.

Chicago

WatkinsX Dictionary, s.v. “negative pledge,” accessed November 4, 2026, https://dictionary.watkinsx.com/word/negative%20pledge.

Source: negative pledge on Wiktionary, CC BY-SA 4.0.