Loans are quite common between businesses — whether that be with a bank or with another business.

There are two main types of business loans: secured and unsecured.

Secured loans, however, are seen as a lot safer for lenders. This is because a secured loan holds a security over the debt. 

And, to effect that security in writing, you’ll need a General Security Agreement.

Why Do I Need A General Security Agreement?

A General Security Agreement sets out the terms by which your personal property can be held as security for a loan.

Typically, you should also have a proper Loan Agreement in place. And, in some cases, that Loan Agreement would have terms around security (if it is a secured loan).

However, on a practical basis, some businesses prefer to have an entirely separate General Security Agreement to be extra safe.

A General Security Agreement gives the lender the right to register their security interest on the Personal Property Securities Register (PPSR) and make a claim over the secured property in the event the borrower defaults on the loan.

So, if you’re ever providing a business loan with security, it’s a good idea to have a General Security Agreement in place.

Need Help?

If you need help with a General Security Agreement, our experienced lawyers are here to help. 

You can reach out to our friendly team on 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat about your specific situation.

About Sprintlaw

Sprintlaw is a new type of law firm that operates completely online and on a fixed-fee basis. We’re on a mission to make quality legal services faster, simpler and more affordable for small business owners and entrepreneurs.

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