Valuation
Pledging a business (fonds de commerce)
A security over a going concern, not over the walls.
- Author
- Serenor Capital
- Published
- Read
- 2 min read
A pledge over a fonds de commerce is common on SME loans. It is also commonly empty by the time the file is non-performing, because the business lived on the trade that has stopped.
What the deed covers
The fonds de commerce is not the building. A debtor can pledge the business and, separately, mortgage premises they own. Many traders are tenants: the only useful real-estate right is then the lease, if it can be assigned and if it has not already been terminated.
The deed and the pledge register say what was included. A model that sets 'collateral = business' and applies a percentage of original turnover invents a method. The turnover of a company that has stopped is not a stock that can be sold.
When the security is already empty in practice
Three findings, on site or in the documents, often empty the pledge: the lease is terminated or expired, the equipment has been sold or moved, the customers left with the manager under another name. The registration can outlive those facts.
A visit or a recent bailiff's report is worth more than the appraisal from origination. Without it, the 'pledged' box on the tape is only a box. See data room checklist.
Price
Value what can be sold: a lease right that is still alive, identified equipment, sometimes a name. Each element has its own market and its own delay. The total is not the sum of original values.
The rest of the claim is treated as unsecured, together with action against the manager's guarantee if it exists and if the guarantor is solvent. Personal guarantees are often, on these files, the real second asset. See guarantor enforcement.
Place in an SME book
On an SME book, the share of lines whose only tangible security is a business pledge should be isolated. It is not mixed with first-ranking mortgages on homes.
That pocket has a high cost of verification and a low median value. Leaving it in the average lifts the price of the whole book. Segmentation exists for that reason.
In this series
- Corporate NPL underwriting
- Collateral value is not recovery value
- First-ranking mortgages and useful rank
- Collateral appraisal for Moroccan NPL pricing
This note is a method of reading a file or a published series. It is not legal, tax or investment advice, and it is not an opinion on a particular exposure. Serenor Capital does not buy claims for its own account, manage a fund, or carry on collection.
Sources and references
- Bank Al-Maghrib, Annual Report on Banking Supervision, financial year 2025 — PDF
- Bank Al-Maghrib, Circular No. 19/G/2002 of 23 December 2002 on the classification of claims and their provisioning, as amended — PDF
- Circular No. 1/W/2025, adopted on 5 December 2025, effective 1 January 2027. It does not restate the 2012–2025 figures discussed here.
- Serenor public series, banks, social basis — Morocco NPL Monitor and methodology
Frequently asked questions
- Does the pledge cover the building?
- No. The walls, when they are mortgaged, are mortgaged by a separate registration. The fonds covers elements of the business — customers, the lease right, equipment and the name — as the deed states.
- Does a registration that is still published prove value?
- No. It proves publicity. Value depends on what can still be realised: a live lease, equipment still on site, a customer base that can be transferred.
Evaluating an NPL Portfolio
Serenor Capital supports financial institutions and investors in the analysis and valuation of non-performing loan portfolios in Morocco.
Serenor Capital publishes research on non-performing loans, distressed-credit valuation and the development of Morocco’s secondary credit market.
This note is general commentary on method and market structure. It is not investment advice, legal advice, or a recommendation in relation to any portfolio, transaction or financial asset.