Personal Property Securities Register (PPSR)
The Personal Property Securities Register (PPSR) can help protect businesses and create opportunities for small business to protect their assets. It is a single, national online database that shows whether someone is claiming a security interest in goods or assets.
The PPSR is not a register of property ownership. Registering on the PPSR is a way to let people know if personal property such as cars, goods or company assets have security interests over them. Registering your security interest correctly on the PPSR can protect you and give you extra rights in the property it’s registered over. This is especially important if the person who gave you the interest becomes insolvent.
What is a Security Interest?
A security interest is an enforceable legal claim that has been guaranteed, usually to obtain a loan. The borrower provides the lender with a security interest in certain assets, which gives the lender the right to repossess all or part of the property if the borrower stops making loan payments.
The agreement that created a security interest doesn’t have to take a specific form, but common examples include:
- Secured car loans
- Hire-purchase agreements for goods
- Fixed and floating charges or general security agreements over company assets
- Retention of title agreements where goods are a supplier on credit
- Service contracts where payment is secured by a security interest in a particular property
It’s important to note that a security interest is not an ownership interest.
What is Personal Property?
Personal property includes almost everything that isn’t land, buildings or fixtures. Things you can register a security interest over include:
- Vehicles, boats and aircraft
- Crops and livestock
- Stock in trade
- New or second-hand goods
- Patents and copyright
- Commercial licences
- Debts and bank accounts
- Shares, cash and cheques
Some personal property is not allowed to be registered on the PSR, even if you have a security interest in it. This includes:
- Land, buildings or fixtures
- Water rights
- Government-issued licences such as taxi licences
Assisting the Small Business Community
The PPSR provides protection from customer default or insolvency (by ensuring they are a secured creditor) in the following ways:
- Register when supplying goods on terms of offering trade credit.
- Register when leasing out assets longer term.
By adding the customer details into the PPSR you are declaring an interest in the goods supplied is how you become a secured creditor and gain asset protection.
It improves transparency by disclosing the information of who you’re dealing with. If a business is buying goods they can make sure they are debt-free by doing a grantor search. A business can also run a bankruptcy search to not only search to check goods are debt-free but to check out the seller and if they have had bankruptcy issues in the past.
The PPSR opens up options for access to finance. A wider range of assets can be used to raise capital and enable a business to see what financiers see when assessing your creditworthiness.
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