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A Security Agreement creates a legal claim on property or assets when someone borrows money or takes on debt. In Canada, it lets lenders protect themselves by getting rights to specific collateral - from business equipment to inventory or accounts receivable - if the borrower defaults on payments.

Under the Personal Property Security Act (PPSA), these agreements must clearly identify both parties, describe the collateral, and outline payment terms. Once registered in the provincial system, a Security Agreement gives the lender "secured creditor" status, putting them first in line to claim the assets if problems arise.

Use a Security Agreement when lending money or extending credit and need protection for your investment. It's especially valuable when financing business equipment, inventory purchases, or other major assets where you need a legal claim on specific property as collateral.

Canadian businesses commonly need these agreements when providing vendor financing, structuring equipment leases, or setting up lines of credit. The agreement becomes crucial before releasing funds or assets to the borrower - it establishes your priority claim under the PPSA and protects your interests if the borrower faces financial difficulties.

• General Security Agreement: Covers all present and future assets of a business, offering the broadest protection for lenders
• Collateral Agreement: Focuses on specific assets or property pledged as security for a loan
• Deposit Control Agreement: Governs control over deposit accounts used as collateral
• Intercreditor Agreement: Establishes priority and rights between multiple lenders sharing the same security
• Transfer Of Shares Agreement: Used when company shares serve as loan security

• Banks and Financial Institutions: Primary users of Security Agreements, they draft and enforce these documents to protect their loans and credit facilities
• Corporate Borrowers: Businesses seeking financing who pledge their assets as collateral under the agreement
• Commercial Lawyers: Draft and review agreements to ensure PPSA compliance and protect client interests
• Equipment Vendors: Use these agreements when providing financing for equipment purchases
• Corporate Officers: Sign on behalf of their companies and ensure compliance with agreement terms
• Insolvency Practitioners: Reference these agreements when determining creditor rights in bankruptcy situations

• Party Details: Gather full legal names, addresses, and registration numbers for all parties involved
• Collateral Description: Create detailed inventory of assets being pledged, including serial numbers and locations
• Loan Terms: Document the principal amount, interest rate, payment schedule, and default conditions
• Asset Valuation: Obtain current market values of pledged assets through professional appraisals
• Corporate Authority: Confirm signing officers have proper authorization to execute the agreement
• PPSA Search: Check for existing security interests against the same assets
• Document Generation: Use our platform to create a customized, legally-compliant Security Agreement that includes all required elements

• Identification Section: Full legal names and addresses of both secured party and debtor
• Collateral Description: Clear, specific details of all assets covered by the agreement
• Grant of Security Interest: Explicit language creating the security interest in the collateral
• Payment Terms: Amount secured, interest rates, and repayment schedule
• Default Provisions: Specific events of default and creditor's remedies
• Representations: Debtor's warranties about ownership and condition of collateral
• Enforcement Rights: PPSA-compliant procedures for seizing and selling collateral
• Governing Law: Specify applicable provincial jurisdiction and PPSA regulations

A Security Agreement differs significantly from a Control Agreement, though both deal with protecting assets and financial interests. Let's explore their key differences:

• Primary Purpose: Security Agreements create a broad legal claim on various types of collateral, while Control Agreement specifically governs access and rights to deposit accounts or investment accounts
• Scope of Protection: Security Agreements cover physical assets, inventory, and receivables, while Control Agreements focus solely on financial accounts
• Parties Involved: Security Agreements typically involve two parties (lender and borrower), while Control Agreements require three parties (lender, borrower, and financial institution)
• Legal Framework: Security Agreements operate under the PPSA's general secured transactions rules, while Control Agreements follow specific provisions about account control and financial institution obligations
• Enforcement Process: Security Agreements allow direct seizure of physical collateral, while Control Agreements enable account access restrictions and fund transfers