Sba General Security Agreement

The Small Business Administration (SBA) General Security Agreement is an important document for small business owners seeking financing from the SBA. It lays out the terms of the agreement between the borrower and the lender, specifying the security interests the lender has in the borrower`s assets.

In essence, the General Security Agreement is a legal document that serves as collateral for the lender in case the borrower defaults on their loan. The agreement is signed by both the borrower and the lender and typically covers all of the borrower`s current and future assets.

From the lender`s perspective, the General Security Agreement is a necessary protective measure. Should the borrower become insolvent, the lender will have a claim on the borrower`s assets in order to recover any outstanding debts. This includes both tangible assets such as equipment and inventory, as well as intangible assets like intellectual property and accounts receivable.

For small business owners, the General Security Agreement is a crucial part of securing financing through the SBA. However, it is important to understand the implications of the agreement before signing. In essence, the agreement grants the lender a significant amount of control over the borrower`s assets, including the ability to sell them off in order to recover outstanding debts.

If you are considering applying for SBA financing, it is important to review the terms of the General Security Agreement carefully with an attorney or financial advisor. While the agreement is an important part of securing financing, it is also important to understand the potential risks and consequences associated with the agreement.

Overall, the SBA General Security Agreement is an important document for small business owners seeking financing from the SBA. By understanding the terms and implications of the agreement, small business owners can make informed decisions about their financing options and ensure that their assets are protected.