Glossary
General security agreement (GSA)
Also called: GSA, general security deed
A general security agreement is a security interest over a company's or individual's personal property, which can include equipment, receivables, stock and other assets that are not land. It is registered on the Personal Property Securities Register.
An example
A lender funding a business secured by property also takes a general security agreement over the operating company's assets, registering it on the PPSR so other creditors can see the interest.
Why it matters
A GSA gives the lender wider recovery options than property security alone and can affect the business's ability to borrow elsewhere. Borrowers should check what assets it covers and whether it restricts selling assets in the ordinary course of business.
Points to check
Read the list of assets covered, because a general security agreement can extend to all present and future property of the company. Check whether it restricts dealing with assets, taking other finance or paying distributions without consent. The lender will usually register the security on the Personal Property Securities Register. Ask how and when it will be released once the loan is repaid, and confirm the registration is removed.
Read about business funding secured by property