PPSR: 101

Any good story will tell you the main facts, such as What, Who, When, Where, Why, How and How Much?

This is the story of the PPSR, and how to prevent any twists in your own business story.

What is the PPSA and PPSR?

The Personal Property Securities Act 2009 (PPSA) is Commonwealth legislation that covers a business’ security interests in personal property. Personal property is considered to be goods or collateral other than real estate.

Examples of personal property include:

• cars, boats and caravans;
• inventory;
• plant and machinery;
• crops and livestock; and
• art.

Personal property can also include non-material items, such as:

• accounts;
• intellectual property;
• shares;
• investment instruments; or
• licences.

The Personal Property Securities Register (PPSR) was introduced in 2012 as a central platform of the PPSA.

The PPSR is a national, online database that lists all the security interests a business has over their personal property that has been leased, hired out or sold on terms to a customer or grantor. In other words, the PPSR addresses the question: “They possess it, but do they own it?”.

The register is available in real time and accessible 24 hours a day, 7 days a week.

Businesses can register or search for secured property on the PPSR.

Who needs to know about it?

You need to know about the PPSR if you:

• sell, hire, rent or lease on terms;
• buy or sell second-hand goods;
• want to raise finance using personal property as collateral.

Why are the PPSA and PPSR important?

The ultimate goals of the PPSA and PPSR are to reduce risk and offer businesses greater certainty so they can access more financing by using their assets as security.

The PPSA replaces a myriad of Commonwealth and state laws with a single and national set of rules for using personal property as secured credit.

By registering on the PPSR, businesses can recover goods they’ve sold or leased on terms if a customer defaults on payment or becomes insolvent.

Done correctly, the registration is a business’s legal declaration that they have a security interest in the goods currently in their customer’s possession.

By searching the PPSR database, businesses can check if goods they’re looking to buy have existing security interests over them.

The register is also used to determine priority for secured creditors in the case of debtor default or liquidation.

The PPSR has a ‘first in, best dressed’ principle, so registering your security interests on the PPSR means you move to the top of the distribution list if a customer becomes insolvent.

When should I register?

Equifax recommends that you register your security interests as soon as you agree to provide a customer credit.

The sooner you do, the sooner you’ll be protected – there are time limits for registering to gain full protection under the PPSA.

You should then re-register your interests regularly. A lapsed registration is a useless registration. 

Where can I register?

You can create an account and register on the government’s PPSR website:

But registering is a complex task, so before you do, please read our tips on avoiding common mistakes.

How do I register?

You can follow the instructions on the government’s PPSR website to register yourself, or you can enlist the help of PPSR experts.

Given the complexity of the legislation, the PPSA and PPSR have become specialty areas for lawyers and business-risk professionals.

Because, while the intent of the PPSR is to create more certainty and reduce business risk, the actual registration process itself is complicated.

Small and innocent mistakes can often invalidate your security interests, rendering your registration invalid. Businesses have lost thousands and even millions of dollars due to typos, wrong identification and wrong boxes being ticked on the registration form.

Compliance with the PPSR has become a major issue – that’s why the government is currently working with the business community to simplify the process.

EDX, from Equifax, has been working with the PPSA and PPSR since it was first introduced, so we’ve been helping businesses navigate the system since day dot.

We conduct audits to review your existing registrations and rectify any mistakes; perform bulk registrations on the PPSR on your behalf; and we can help you implement systems and processes for ongoing and correct registrations.

We’re also leading the way on developing a best-practice standard for PPSR.

How much does it cost to register?

The government charge is less than $10 per PPSR registration.

For about two cups of coffee, it’s a pretty good price to protect your business.  

How much will it cost if I don’t register?

While highly dependent on each situation, businesses have been known to have lost goods worth millions of dollars because they didn’t register or have registered incorrectly.

The PPSA and PPSR have given legislative backbone to retention of title rights. But to enforce your rights, you need to register. 

Choose a happy ending. Choose to register on the PPSR – and choose to do it right.

If you'd like to speak to an Equifax Account Manager, simply email us. A representative will be in touch with you soon to discuss your PPSR requirements.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.