General security agreement (GSA)

Most acquisition lenders in Canada, whether a bank, BDC or a program lender under the CSBFP, will require a GSA rather than security over one specific asset. It gives the lender a claim across the whole operating business, not just a building or a piece of equipment, which is why it is called “general.”

What it typically catches

• Inventory, equipment and fixtures owned now or acquired later
• Accounts receivable and other book debts
• Intangibles, including goodwill and intellectual property
• Proceeds — what the business receives if any of the above is sold

Why a buyer needs to find it, not just sign one

On an asset purchase, a buyer is not taking over the seller’s GSA — the new lender registers a fresh one against the buyer’s own company. The diligence question runs the other way: whether the seller’s existing GSA has actually been discharged from the assets being purchased, since an undischarged one can leave a lender’s claim attached to equipment or receivables the buyer believes it is acquiring free and clear.

How it is made public

On its own, a GSA is a private contract between the borrower and the lender. It only becomes visible to third parties, and enforceable against a later buyer or another creditor, once it is registered under the relevant provincial personal property security regime — a separate step covered under PPSA registration.