General Security Agreements and Guarantees
Security documents for business loans, related party lending and supplier credit, with the financing statement registered on the PPSR.
- General security agreements over present and after-acquired property
- Personal guarantees and indemnities from directors and related parties
- Mortgages of shares and deeds of priority between lenders
- PPSR registration handled as part of the work
Securing a loan
What a General Security Agreement Does
A general security agreement (GSA) gives a lender a security interest over a borrower's personal property, so the lender has a claim on those assets ahead of unsecured creditors if the loan is not repaid.
Personal property means almost everything other than land: equipment, stock, vehicles, debts owed to the business, intellectual property and shares. A GSA usually covers all of the borrower's present and after-acquired property, although it can be limited to particular assets where that is what the parties have agreed.
The security interest only does its job if it is perfected, which usually means registering a financing statement on the Personal Property Securities Register (PPSR). Registration should be made within 20 business days of the agreement taking effect. A late registration can be lost if the borrower goes into administration or liquidation within 6 months, leaving the lender unsecured.
A GSA is often given alongside other documents. A guarantee and indemnity is a promise by a director or related party to pay if the borrower does not. A mortgage of shares gives the lender security over shares in the borrowing company or its holding company. A deed of priority records which lender ranks first where more than 1 lender holds security over the same assets.
What it covers
What We Prepare
Each set of documents is prepared to match the loan and the parties involved, whether you are the lender or the borrower.
General Security Agreement
Security over all present and after-acquired property, or over specified assets, with the obligations the borrower must meet while the loan is outstanding.
Guarantee and Indemnity
A guarantee from a director, shareholder or related entity, with any limit on amount or duration that has been agreed.
Mortgage of Shares
Security over shares or units in the borrowing entity, with the share certificates and signed transfer held by the lender.
Deed of Priority
An agreement between lenders setting out who ranks first, up to what amount, and how proceeds are shared on enforcement.
PPSR Registration
Registering the financing statement against the correct grantor details and collateral class, with the verification statement provided.
Release and Discharge
Discharging the financing statement and releasing guarantees once the loan has been repaid in full.
Fixed fees for this work are published on our pricing page.
Get a Fixed-Fee QuoteHow it works
How It Works
Tell us about the loan
Who is lending, who is borrowing, the amount, any guarantors and the assets to be secured.
We confirm the fee
You receive a fixed fee in writing before any work starts.
We prepare the documents
The GSA, guarantee and any share mortgage or priority deed, consistent with the loan agreement.
Signing and registration
We arrange signing and register the financing statement on the PPSR, then confirm the registration details to you.
Before you start
What to Have Ready
Security documents are quicker and cheaper to prepare when the loan terms are settled before we start.
The parties: Full names of the lender, borrower and each guarantor, with ACNs for any company and trust details where a trustee is involved.
The loan terms: The signed loan agreement or the agreed amount, interest, repayment and term. If there is no loan agreement yet, we can prepare that as well.
The assets: Whether the security is over all assets or particular assets, and serial numbers for any motor vehicles or equipment that need to be described.
Existing security: Any bank or other lender that already holds security over the borrower, as their consent or a deed of priority may be needed.
Common Mistakes
Registering late or not at all: An unregistered or late-registered security interest can be lost on insolvency, which is exactly when the lender needs it.
Wrong grantor details: A company grantor must be registered against its ACN. An error in identifying the grantor can make the registration ineffective.
Overlooking existing finance: Many bank facilities prohibit further security without the bank's consent. Granting a GSA in breach can put the borrower in default.
Forgetting the release: When the loan is repaid, the financing statement should be discharged and any guarantee released. A borrower is entitled to ask for this.
Points Worth Knowing
Related party loans
A loan from a director, family member or family trust to a company is unsecured unless it is documented and registered.
Land is separate
A GSA does not cover real property. Security over land needs a registered mortgage, which is a separate document.
Guarantees can be limited
A guarantee can be capped at an amount or limited in time, where the lender agrees.
Priority is not automatic
Without a deed of priority, ranking between secured lenders generally follows the PPSR rules, including the order of registration.
Supplier credit
Suppliers selling on credit can protect their position through retention of title in their terms of trade, registered on the PPSR.
Keep the records
Keep the signed documents and the PPSR verification statement together for the life of the loan.
We prepare and register security documents. We do not act in enforcement or recovery proceedings.
Talk to Us About Your MatterSecurity documents usually sit alongside a loan agreement, and family guarantors are often asked to obtain independent legal advice.
General Security Agreement FAQs
What is a general security agreement?
Does a general security agreement need to be registered?
What is the difference between a GSA and a guarantee?
Can a GSA cover land or a property?
What is a deed of priority?
What do these documents cost?
Should a guarantor get independent legal advice?
Have a question that is not answered here?
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Tell us about the loan and the parties, and we will confirm a fixed fee before any work starts.
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