This information is to help you decide if the Personal Property Securities Register (PPSR) is relevant to you.
If you decide to register on the PPSR, make sure you have an agreement in place which creates a security interest in the goods you’re supplying. For specifics about your business, you may wish to seek professional advice from your advisor.
What is the PPSR?
The Personal Property Securities Register (PPSR) is the official government register of security interests in goods or assets, known as personal property. It’s an online noticeboard accessible by the general public 24/7.
Personal property is a legal term that means any property that is not land, buildings or fixtures. Some common examples include:
- Cars and utes
- Trucks, tractors and trailers
- Machinery
- Tools
- Scaffolding and temporary fencing
- Building materials (before they’re actually fixed to the build)
- Your ‘stock’ if you’re a manufacturer, for example clothing, wine and furniture
- Jewellery and artworks
There are two ways to use the PPSR – either by searching or making a registration. Millions of searches and registrations are completed each year.
Video - The PPSR in a nutshell
How can the PPSR help protect you and your interests?
When buying goods
Searching the register lets you know if the valuable goods you are interested in buying are being used as security for a debt or other obligation. The register won’t tell you the value of the obligation, but it lets you know who the obligation is owed to so you can find out more.
For example, someone may try to sell you used goods like a van or piece of machinery without telling you they still have finance owing on it.
And if they stop making payments on the loan there’s a very real chance the finance company could take those goods away, without paying you for your financial loss.
For $2 you can check the PPSR and find out if the goods you want to buy are likely to be free of debt and safe from possible repossession.
When selling goods on retention of title or consignment
Think you’re already covered with a contract? A correctly worded invoice or contract, along with an effective PPSR registration, can put you ahead of banks, other lenders and outstanding tax debts, if your customer goes out of business.
It is important to check your invoice or contract terms and make sure you have an agreement in place which creates a security interest in the goods you're supplying.
Be aware - just displaying your terms on the back of invoices or order forms may not be enough to create an enforceable security interest. To avoid uncertainty, get the help of a legal advisor in setting up your security agreement or contract terms.
Add your information to the PPSR by making a PPSR registration. Making a registration shows searchers that you are claiming an interest in the goods or assets you are selling on retention of title terms, or have consigned to someone else to sell on your behalf. This interest means the goods or assets secure the debt or obligation that someone owes you. A PPSR registration helps protect your interest in the goods or assets if your customer defaults on payments or goes broke.
If you don’t make a registration against those goods or assets and your customer goes broke before they have fully paid you, your goods may be sold to pay secured creditors first. If you are not registered, you may be an unsecured creditor in an insolvency and may not recover much, if anything, of what you are owed.
By registering as early as possible, you stand the best chance of being first in line over other creditors. A PPSR registration also helps you to protect your interest even if the goods or assets are sold on, mixed with or installed onto other goods.
Video - Small business and the PPSR - YouTube
When leasing, renting or hiring our goods
If the new lease or hiring arrangement is for at least two years, or an indefinite period then this applies to you.
Video - PPSR - Protection for business that hire, lease and rent goods
Making a PPSR registration puts the world on notice you’re claiming a security interest in goods you’ve supplied.
Make sure you have an agreement in place which creates a security interest and back up your agreements by registering on the PPSR.
A registration costs $6 and will cover you for 7 years.
When accessing finance
Did you know that lenders will search the PPSR as part of a credit check? Do you know what’s listed on the PPSR against you and/or your business?
A PPSR grantor search is often conducted by lenders as part of a credit check – so it’s good for small businesses to occasionally check what is listed on the PPSR.
For more information when there is an unexpected registration against your business, and how a registration can be disputed if its incorrect - see our guide Accessing finance or credit – do you know what's registered against you on the PPSR?,
Possible next steps
If you think the PPSR would be useful for your business, you may wish to seek professional advice from your accountant, financial advisor or lawyer to discuss the specifics of your business.
Helpful resources:
This factsheet provides practical advice on how a PPSR registration can help get your invoices paid - Trying to get your invoices paid?
This factsheet aims to help you make sense of a PPSR company/business search known as a ‘Grantor Search’ - Accessing finance or credit – do you know what’s registered against you on the PPSR?
There are also case studies to help understand the benefits of the PPSR for your industry, see PPSR case studies