When should you use the PPSR?
Following the introduction of the Personal Property Securities Register (PPSR) in Australia in 2009, one of the questions that people often raise is – why should I use the PPSR and when should they use it? And the simple answer is protection. Protection for you as a business owner and protection for you as a consumer.
PPSR for Individuals/Buyers
A PPSR check is critical when you are buying certain goods. If the item is being used as security for an obligation, you need to know before purchasing. While it won’t tell you all the details about the debt such as the amount of the debt, it will at least give you a starting point to find out more information.
One of the details it will provide is who the debt is owed to, and you can use this to research more before committing to buy.
This process is extremely important as you could be seriously impacted if the borrower stops making payments on their loan. If this happens, then the actual finance company for the goods can repossess the products. You won’t be compensated for this loss, and so you will be out of pocket for the amount you paid, and also without the item you bought.
Conducting a PPSR search allows you to find out if the goods you are planning to buy are used as a security for any obligation. For just a small fee, you can conduct a cheap PPSR check to ensure that the goods you want to buy are safe from repossession and free of financed debt.
PPSR for Businesses
Using the PPSR can protect your business in Australia. And here are three ways that registering your interest with the Personal Property Securities Register can help you.
Use the PPSR for hiring, leasing, or renting out goods
Registering your assets or goods protects your interest even when they are not in your possession. Once you intend to lease any personal property of any kind and the period is expected to run for at least two (2) years, then you should register your interest on the PPSR.
If you don’t register the goods or assets you are leasing, hiring or renting out and your customer goes bankrupt, your property may be sold to pay creditors.
The PPSR is ideal for selling goods on consignment or retention of title
When you register your goods or assets with the PPSR, you are showing potential buyers of that good or asset that you have a claim to it and that you are registered first. This is important if you are selling an item on consignment or retention of title terms.
Registering allows you to show that the items belong to you before they may be sold to cover the person’s debts.
Plus, it shows prospective buyers your interest if the person selling it does not declare that they do not have full ownership rights.
This is especially important if the consignee or buyer goes bankrupt, broke, or defaults on payments. If you are not registered with the PPSR, you are considered an unsecured creditor. This means you will be considered last when settling debts as secured creditors will be paid first. However, you stand the chance of being paid first if you register your assets or goods as early as possible. Registering your goods or assets on the PPSR database also protects your interest even if the assets or goods are sold, mixed or installed on other goods.
PPSR Protects Your Contract
Yes, we know that the title clause of your contract or invoice will state that the title of the goods you have sold will remain with you until the products have been fully paid for. But, this will not protect you completely. If someone else registers an interest in this good before you, they will be given preference ahead of you. They will be paid first if your customer defaults on payment or goes bankrupt.
That’s why you need to register your goods sold and with payments outstanding on the Personal Property Securities Register. It serves as an added protection to back up your contract.
While free PPSR checks are not available, you can conduct a quick PPSR search for an extremely low rate. This is an excellent investment that can protect you from certain risks that could amount to thousands of dollars lost.
If you are a buyer looking to purchase goods such as a car or machinery, do a PPSR check. If you are a business that has provided a lien to someone, post it to the registry so that prospective buyers know and so that you could use it to raise revenues for your business.
The PPSR is for your protection. Request your PPSR check today through Quick Revs.