If you supply goods or assets, you could be putting your business at risk. The PPSR could be of benefit to you and reduce the risk.
PPSR stands for Personal Property Securities Register and is an online service account where you can register a legal claim to your personal property.
The register helps businesses and individuals protect themselves financially, reduce investment risk, gain access to credit, and make better-informed financial and purchasing decisions.
If you’re selling goods on credit, you’ve probably signed a contract establishing your rights to the property should the customer fail to pay. But what if there are other creditors waiting in line?
Registration puts you in a better position to recover goods, or their value, should a customer default, giving you priority over creditors who’ve not registered an interest, and those who register after you. Almost anything of value – excluding land, buildings and ships greater than 24 metres in length – can be used to secure the repayment of a debt.
As a ‘Secured Creditor:
You require a customer to sign a hire purchase, lease or trade agreement that includes retention of title clause. Registering a security interest in the property on the PPSR gives you a much better chance of recovering what you’re owed should the customer be unable to pay.
You’re looking for a used car, but you want to be sure there’s no money owing on it. A quick search of the PPSR can tell you if any third party has registered a security interest in the vehicle.
A customer with cash-flow difficulties asks your company for a loan, offering a vehicle or other goods as collateral (security). You can search the PPSR to see whether the customer has offered the same collateral to other lenders.
A customer wants to buy goods from you, but you have some doubts about their creditworthiness. To help you assess the risk involved, you can check the PPSR for any security interests registered against the customer’s property.
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Disclaimer: EC Credit Control does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.