A general security agreement (GSA) is a special agreement that allows business owners to secure their commercial loans with certain types of collateral. If the business owner defaults on the loan, the creditor may reclaim the asset noted in the security agreement as repayment. These agreements can secure current or future debts, and the underlying property can be tangible assets such as machinery, equipment, or inventory or intangible assets such as accounts receivable, trademarks, intellectual property, stocks, or bonds.
Corporations typically act as the guarantor on GSAs, but partnerships, LLCs, and occasionally individuals may also issue these agreements. Analysts who provide small business tips claim you should have a professional look over your security agreement, as GSAs can be complicated. Ideally, you need to ensure all of your information is correct on the agreement and that you understand what happens in case of a default.