Insight · Financial services

What Is a General Security Agreement (GSA)?

Published 22 July 2026

The modern Australian equivalent of the fixed and floating charge — how a GSA works, how it registers on the PPSR, and what to negotiate before signing.

A General Security Agreement (GSA) is the contract a lender uses to take security over all of a borrower's business assets — everything from equipment and stock to receivables, bank accounts, IP and after-acquired property. It is the modern Australian equivalent of the old "fixed and floating charge" and sits under the Personal Property Securities Act 2009 (Cth) (PPSA).

What a GSA actually does

Two things happen when you sign a GSA:

Attachment. The grantor (borrower) grants the secured party (lender) a security interest in the collateral. Under a GSA the collateral is defined broadly — all present and after-acquired property, often abbreviated as "ALLPAAP".
Perfection. The secured party then perfects that interest, usually by registering a financing statement on the Personal Property Securities Register (PPSR). Perfection sets the priority date and protects the interest against later secured parties and against a liquidator.

What "all present and after-acquired property" covers

ALLPAAP is deliberately wide. It picks up:

Plant, equipment and vehicles.
Inventory (raw materials, work in progress, finished stock).
Debts owed to the business (accounts / receivables).
Bank accounts and cash equivalents (subject to PPSA priority carve-outs for ADIs).
Intellectual property owned by the grantor.
Contractual rights.
Anything the grantor acquires after the GSA is signed — hence "after-acquired".

Real property (land) is not covered by the PPSA and needs a separate mortgage.

GSA vs specific security agreement

A specific security agreement covers named collateral only — for example, one truck by VIN, or a defined class of inventory. Lenders use specific security where the loan is tied to a particular asset (asset finance, floor-plan finance). A GSA is used where the lender wants the whole business as security — typical for working capital lines, term debt, and private credit facilities.

Priority and the PPSR

The PPSA rewards perfected security interests. General priority rules:

Perfected interests beat unperfected interests.
As between perfected interests, priority follows the earlier registration or perfection date — unless a Purchase Money Security Interest (PMSI) applies, which can jump the queue.
An unperfected security interest vests in the grantor on insolvency under section 267 of the PPSA — meaning the lender loses its security and joins the queue of unsecured creditors. This is the single biggest trap for lenders who do not register on time.

Key clauses to read before signing

Definition of secured moneys. Is the GSA cross-collateralised — does it secure future or related-party debts, not just this facility?
Events of default. Watch for "material adverse change" and cross-default triggers linked to other facilities.
Financial undertakings. Ratios, reporting deadlines and information covenants can be tripped inadvertently.
Enforcement rights. The lender's ability to appoint a receiver, take possession, and sell collateral — often on very short notice.
Costs and indemnities. The grantor typically indemnifies the lender for enforcement costs on a full-indemnity basis.
Personal guarantees. Frequently annexed to a GSA. Sign separately, and only after you understand the exposure.

Common negotiation points

Carving specific assets out of the ALLPAAP grant — for example, IP or trust property.
Reasonable cure periods before enforcement.
Cap on cross-collateralisation to defined facilities.
Notification and consultation obligations before receiver appointment.
Right to sell assets in the ordinary course of business without lender consent.

Enforcement in practice

If the borrower defaults, the secured party typically appoints a receiver or a controller under Part 5.2 of the Corporations Act 2001 (Cth). Receivers act in the interests of the secured creditor, take control of the collateral, and can sell the business as a going concern. Directors often lose day-to-day control immediately. Understanding this before signing — not after — matters.

Where this fits in your legal setup

GSAs come up in almost every debt-funded transaction: working capital facilities, private credit, vendor finance in a business sale, and shareholder loans. We review them as part of our Business Contracts and Business Sales & Acquisitions work, and as ongoing coverage under Fractional General Counsel.

Frequently asked questions

What is a General Security Agreement (GSA)?

A GSA is a written agreement under which a grantor (usually a company borrower) grants a secured party (usually a lender) a security interest over all of the grantor's present and after-acquired property. It is the modern equivalent of a fixed and floating charge.

Do I have to register a GSA on the PPSR?

Registration is not strictly mandatory, but an unregistered security interest is virtually worthless in an insolvency. To perfect the interest and preserve priority the secured party must register on the Personal Property Securities Register (PPSR).

What is the difference between a GSA and a specific security agreement?

A GSA covers all present and after-acquired property (an ALLPAAP interest). A specific security agreement covers only nominated collateral — for example, a particular vehicle, a class of inventory, or a bank account.

Can a director be personally liable under a GSA?

A GSA granted by the company does not itself make a director personally liable. Lenders typically ask for a separate personal guarantee, often supported by a mortgage or additional security. Do not sign a personal guarantee without advice.

What happens if I default under a GSA?

On default the secured party can enforce the security — typically by appointing a receiver or a controller under the Corporations Act. Enforcement rights are governed by the GSA, the PPSA, and general law, and can move very quickly.

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