Loans, Security & Guarantees

Q: What is a general security agreement?

Security over a company's assets and undertaking, registered on the Personal Property Securities Register. It is the standard way a lender takes security over a business that has no land to mortgage.

Q: Why does PPSR registration timing matter so much?

A security interest registered late can be ineffective against a liquidator or administrator if the borrower becomes insolvent within a certain period. The registration window is short, which is why we attend to it rather than leaving it as a task in a letter.

Q: What is a Division 7A loan agreement?

Where a private company lends money to a shareholder or associate, the tax law can treat the advance as a deemed dividend unless there is a complying loan agreement in place by a required date, on minimum terms. We prepare the agreement to the terms your accountant specifies.

Q: Can I limit a personal guarantee?

Often yes: a dollar cap, an exclusion of future advances, a limit on the number of guarantors, or a release once conditions are met. Whether the lender agrees depends on their position, but almost nobody gets a concession they never asked for.

Lending Money? Get It Documented and Get It Secured.

Loan agreements — related-party, family and commercial third-party.
Division 7A loan agreements prepared to your accountant’s requirements.
Guarantees and indemnities, and advice on what one actually exposes.
General security agreements with the PPSR registration actually attended to.
Deeds of priority, vendor finance and mortgages of shares.

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Solicitor preparing a loan agreement and security documents for a NSW business

Documented is not the same as secured

Two Separate Questions, and Most People Only Answer One

The first question is whether the loan is documented — is there an agreement saying how much was lent, what interest applies, when it is repayable and what happens on default. Plenty of loans between family members, related companies and business partners fail at this first step entirely.

The second question is whether you are secured. A loan agreement on its own makes you an unsecured creditor: if the borrower fails, you stand in line behind the bank, the ATO and anyone who took security properly. Being secured means having a registered interest over something — a general security agreement over the business assets registered on the PPSR, a mortgage over land, a charge over shares.

We deal with both. And the registration is not left as a recommendation in a letter — where the document needs a PPSR registration, we attend to it.

Corporate Legal provides legal services only — not credit, financial or taxation advice. Whether to lend, on what terms, and how the arrangement is treated for tax are matters for you and your accountant or licensed adviser. We are not a credit provider and do not arrange finance.

About to lend or borrow? Let’s document it properly

What we prepare

Lending and Security Documents

All on a fixed fee, quoted before we start.

Loan Agreements

Related-party, family and third-party commercial loans — amount, interest, repayment, default and enforcement, written so the position is clear years later.

Division 7A Loan Agreements

Complying loan agreements where a company has advanced money to a shareholder or associate — prepared to the terms your accountant specifies.

Guarantees & Indemnities

Guarantees given and taken — drafted with limits and release provisions, and explained plainly to whoever is being asked to sign one.

General Security Agreements

Security over a company’s assets and undertaking, with the financing statement registered on the PPSR — because an unregistered security is close to worthless.

Deeds of Priority

Priority and subordination deeds settling who ranks ahead of whom where more than one lender has taken security over the same assets.

Vendor Finance

Where the seller of a property or business leaves part of the price outstanding — documented, secured, and with the default position spelled out before settlement.

Mortgages of Shares

Charges and mortgages over shares or units, so a lender holds real security in the entity rather than a promise from the person behind it.

PPSR Registration

Registering, amending and discharging financing statements — including retention of title registrations for suppliers who trade on credit.

Independent Legal Advice

Certificates of independent legal advice where a bank or lender requires a guarantor to be separately advised before signing.

Tell us who is lending what to whom, and we’ll quote the documents.

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Why it matters

Where Undocumented Lending Goes Wrong

It Was Never a Loan

Money advanced without documents is frequently characterised later as a gift, a capital contribution, or income — by the other side, by a court, or by the ATO.

Last in the Queue

An unsecured lender ranks behind every secured creditor. If the borrower fails, the difference between a registered security and none is usually the difference between recovery and nothing.

Registered Too Late

The PPSR has strict timing rules. A security registered outside the required window can be ineffective against a liquidator — which is exactly when you need it.

A Guarantee With No Limit

Guarantees are routinely signed without a cap, without a release mechanism, and without the guarantor understanding it covers future advances too.

Division 7A Missed

A company advance to a shareholder without a complying agreement in place by the required date can be treated as a deemed dividend, with a tax bill attached.

No Enforcement Path

A loan with no stated repayment date, no default clause and no security leaves you with a debt that is expensive and slow to enforce, if it can be enforced at all.

Documents are cheap. Recovering an undocumented loan is not.

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Before you sign one

What a Personal Guarantee Actually Means

Guarantees are signed casually and enforced ruthlessly. When you guarantee a company’s obligations, you are agreeing that if the company does not pay, you personally will — from your own assets, including the family home if it is available.

Most standard guarantees go further than people assume. They often cover not just the current debt but future advances. They frequently have no dollar cap. They usually continue even if you have sold your shares or left the business, unless someone negotiated a release. And where the guarantee is supported by a mortgage or a charge, the lender does not have to sue you first — it can go straight to the security.

Where you are being asked to sign one, we tell you plainly what it covers and what it exposes, and negotiate a cap and a release where there is room to. Where a lender requires it, we also provide the certificate of independent legal advice.

Been asked to sign a guarantee? See Independent Legal Advice

Advice on a personal guarantee for a NSW business loan

How we work

From Instructions to Registered Security

Tell Us the Arrangement

Who is lending, who is borrowing, how much, on what terms, and what security is available. A short call is enough.

Fixed Fee Quoted

The documents, the scope and the fee confirmed in writing before we begin.

Accountant Confirmation

For related-party and Division 7A arrangements we work from your accountant’s written instructions on the terms required.

Drafted & Reviewed

Loan and security documents prepared and checked by a solicitor, with a plain-English note on the enforcement position.

Signing & Any ILA

Execution arranged, and independent legal advice provided to a guarantor where the lender requires it.

Registration

PPSR financing statements registered within time, mortgages lodged, and the discharge attended to when the debt is repaid.

Why Use Corporate Legal

We Register, Not Just Recommend

Where a document needs a PPSR registration, we do it and confirm it — within time. An unregistered security is the most common expensive mistake in this area.

Security Over Property Too

Mortgages, caveats and second mortgages over land are property work, which is what this firm does every day.

Fixed Fee

Quoted before we start. You know what the documents cost before you decide whether they are worth it.

Plain About Exposure

If you are being asked to guarantee something, you will get a straight explanation of what that means for you personally — not a covering letter.

We Work With Your Accountant

Division 7A and related-party terms come from them; the drafting comes from us. Nobody is guessing what the other one intended.

ILA Certificates

Independent legal advice for guarantors is routine work here, so a lender’s requirement does not hold up your settlement.

Get the loan documented and the security registered properly.

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Where Lending Meets Property

A great deal of business lending is ultimately secured over land — a second mortgage, a caveat, a guarantee supported by the family home, or vendor finance on a property sale. Because Corporate Legal is a property practice, the security side is handled in-house rather than referred out, and the conveyancing and the loan documents move on the same timeline.

Explore: Caveats · Independent Legal Advice · Commercial Conveyancing · Company, Trust & Structuring · All Commercial Services

Loans & Security FAQs

Do I really need a loan agreement to lend money to family?

If you would be unhappy to lose the money, yes. Undocumented family and related-party advances are routinely re-characterised later as gifts, and they cause serious problems in relationship breakdowns, deceased estates and insolvencies. A short agreement recording the amount, the terms and the intention costs very little and settles the question.

What is the difference between a loan agreement and security?

The loan agreement records the debt and the terms. Security gives you a right over an asset if the debt is not paid. You can have one without the other — and a loan agreement with no security leaves you an unsecured creditor, ranking behind everyone who did take security.

What is a general security agreement?

It is security over a company’s assets and undertaking — broadly, everything it owns — registered on the Personal Property Securities Register. It is the standard way a lender takes security over a business that has no land to mortgage.

Why does PPSR registration timing matter so much?

Because a security interest that is registered late can be ineffective against a liquidator or administrator if the borrower becomes insolvent within a certain period. The registration window is short and unforgiving, which is why we attend to it rather than leaving it as a task in a letter.

What is a Division 7A loan agreement?

Where a private company lends money to a shareholder or their associate, the tax law can treat the advance as a deemed dividend unless there is a complying loan agreement in place by a required date, on minimum terms. We prepare the agreement to the terms your accountant specifies — they determine the tax treatment, we draft the document.

Can I limit a personal guarantee?

Often, yes — a dollar cap, an exclusion of future advances, a limit on the number of guarantors, or a release once certain conditions are met. Whether the lender will agree depends on their position, but almost nobody gets a concession they never asked for. We tell you what is realistic to push for.

What is a deed of priority?

Where two or more lenders hold security over the same assets, a priority or subordination deed sets out who is paid first. Without it, priority is decided by registration rules that may not match what the parties actually intended.

Can you help me recover a loan that has not been repaid?

This service is documenting and securing lending arrangements while the parties are agreed on what the arrangement is. If a loan has already defaulted and you need enforcement, mention it on the first call and we will point you in the right direction.

Lending, borrowing or guaranteeing? Get it right at the start.

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Document the Loan. Register the Security.

The difference between recovering a loan and writing it off is usually decided long before anything goes wrong — in whether the arrangement was documented and whether the security was registered in time. Corporate Legal prepares loan and security documents for NSW businesses and families at a fixed fee, and attends to the registration.

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