Definition
A general security agreement, or GSA, lets a lender take security across the movable assets of a business, from plant, vehicles and stock to debtors and occasionally intellectual property, usually extending to things bought after signing. The lender records it on the PPSR. Both secured and so-called unsecured lenders ask for them, and one can limit how freely you pledge those assets elsewhere.
A GSA is one of the most common documents in small business lending and one of the least read. It can matter a great deal when you later want to borrow against business assets.
What it covers
A typical GSA covers all of the business’s present and after-acquired personal property. That can include machinery, vehicles, stock, cash at bank, receivables and intellectual property. It does not normally cover land.
Registration and priority
The lender registers its interest on the PPSR. Registrations generally rank in order, with special rules for finance used to buy a specific asset. A later lender may need the GSA holder’s consent or a priority agreement.
What to negotiate
Ask whether the GSA can be limited to specific assets, whether vehicles or equipment financed elsewhere can be excluded, and how quickly it will be released once the loan is repaid. Our guide to loan security and GSAs explains more. Questions about an offer? Make one enquiry.
Common questions
Does a GSA cover my house?
Normally not. A GSA reaches movable business assets rather than real estate. Property needs a mortgage or caveat. Your home can only be pledged through a separate mortgage or a secured guarantee.
Can a GSA be limited?
Sometimes. You can ask for specific assets, such as vehicles financed elsewhere, to be excluded, or for security over named assets only.
Sources and further reading
Related terms