A General Security Agreement is a common form of security provided by a debtor to a creditor.

It provides a mechanism whereby the creditor can attach a security interest over a specific group of assets, or over all the assets of a business together.

They form the basis for creditors registering their interests on the Personal Property Securities Register so that it is public record that they have a financial interest in assets of a debtor.

General Security Agreements can also be invaluable for clients’ personal structures so they have the comfort that where their structure consists of a number of different entities with advances and loans being made inter-entity, the lending entities have security over the debtors’ assets.

They are invaluable in the sense that the General Security Agreement is making the lending entity a secured creditor which would rank ahead of unsecured creditors if the borrowing entity was to fail.