Effective use of personal property security – How can the PPSA enhance your security?

Bank and non-bank lenders alike have for some time understood the need to create and register personal property security interests as part of loan security portfolios. However, for many lenders, this is merely a 'must to' step without a good understanding of why or how such personal property security can be used to enhance your security position.

In this article we will address the fundamental reasons for adding personal property security to a loan, as well as how personal property security can be used to add real value.

The basics - why every loan should include a General Security Agreement

A general security interest, which is a security interest over all present and after acquired personal property of the borrower (or AllPAP), is usually created via the use of a General Security Agreement (GSA) and is a must for any loan product.