In short
A general security agreement, or GSA, gives a lender or investor security over all of a company's present and after-acquired property — cash, receivables, equipment, IP and goodwill — rather than a single defined asset. It's the standard security document for venture debt, working capital facilities and investor-backed lending, and it's only effective once perfected by registration on the Personal Property Securities Register.
What a GSA actually secures
A general security agreement grants the secured party an interest in the whole of the grantor's present and after-acquired personal property — everything from bank balances and trade receivables through to plant, inventory, intellectual property and goodwill. It's the broadest form of security available under the Personal Property Securities Act 2009 (Cth) short of taking mortgages over specific real property as well, and it's the default security document expected by venture debt providers, working capital lenders and investors taking security for a convertible note or shareholder loan.
All present and after-acquired property, correctly described
The 'all present and after-acquired property' language needs to be paired with a PPSR registration that correctly reflects the collateral class as 'all present and after-acquired property' with no exclusions unless exclusions are genuinely intended — a registration that narrows the collateral description inadvertently limits what the secured party can actually claim on enforcement, regardless of what the deed itself says.
Circulating versus non-circulating security
Under the Corporations Act 2001 (Cth), the distinction between circulating and non-circulating asset classes matters directly on insolvency, because employee entitlements and certain other priority claims are paid ahead of a circulating security interest holder from the proceeds of circulating assets such as inventory and receivables. We draft the GSA and structure any control arrangements over accounts with this priority waterfall in mind, since it directly affects how much a secured lender actually recovers if the borrower goes into administration or liquidation.
Registration timing and vigilance
Registration needs to occur promptly and, ideally, before or at the same time as funds are advanced — a security interest registered late remains vulnerable to being voided as an unfair preference or, in some circumstances, simply outranked by an earlier-registered competing interest over the same collateral. We also monitor the registration for its full term, because an expired or lapsed registration effectively unwinds the priority the lender thought it had secured.
Negative pledges and dealing restrictions
The GSA typically includes negative pledge covenants restricting the grantor from granting further security, disposing of material assets outside the ordinary course of business, or changing its structure without consent. These restrictions are what give the secured party practical control between drawdown and default, not just a paper right to enforce after the fact, and we tailor them to the borrower's actual operating needs so the covenants don't unintentionally block ordinary trading.
What the fixed fee covers
- General security agreement drafted over all present and after-acquired property
- PPSR registration with correctly configured collateral class
- Circulating asset structuring advice with reference to the Corporations Act priority waterfall
- Negative pledge and dealing restriction covenants
- Registration monitoring advice for the life of the security
Mistakes we see
- PPSR registration that narrows the collateral class and unintentionally excludes assets the deed was meant to cover
- Registering after funds are advanced, exposing the interest to a preference claim
- No plan for registration renewal, allowing the interest to lapse before the facility is repaid
- Negative pledge covenants so broad they block the borrower's ordinary day-to-day trading
- No consideration of the circulating asset priority waterfall before assuming full recovery on default
Who this is for
- Venture debt and growth lenders taking all-asset security
- Investors securing a convertible note or shareholder loan
- Working capital and trade finance lenders
- Fintech and alternative lenders financing SME borrowers
Frequently asked questions
- How is a GSA different from a specific security deed?
- A GSA covers all present and after-acquired property of the grantor, while a specific security deed is limited to a defined asset or asset class. Lenders financing a business generally (rather than a single asset) use a GSA.
- When is the security actually effective?
- The GSA is a valid contract from execution, but it's only perfected — and therefore effective against a liquidator or a competing secured party — once properly registered on the PPSR against the correct collateral class.
- What's the difference between circulating and non-circulating assets?
- Circulating assets, broadly inventory, receivables and cash generated in the ordinary course of business, are subject to a statutory priority for employee entitlements ahead of the secured creditor on insolvency. Non-circulating assets, like plant and equipment, aren't subject to that carve-out, which affects how much a secured lender ultimately recovers.
- Can the borrower still deal with its assets after granting a GSA?
- Yes, within the ordinary course of business unless the deed says otherwise. The negative pledge covenants restrict unusual disposals or further security, not everyday trading.
- What happens if the PPSR registration lapses?
- The security interest becomes unperfected, meaning the lender's priority position is lost and it risks ranking as an unsecured creditor on the borrower's insolvency. We recommend registering for the full expected life of the facility plus a buffer, and monitoring renewal dates.
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