If your business supplies goods to customers on credit, your terms of trade should include clauses relating to the PPSR. If your terms have PPSR provisions but you have not been registering those interests on the PPSR, you should start.
Once you are granted a security interest, you can (and should) register that interest on the PPSR as soon as possible. Registering your security interests on the PPSR is easy. It only takes a few minutes and the registration process can be completed online. The fee for registering your financing statement on the PPSR is $20.00. Your financing statement lasts five years but it can be renewed, if you still need it when it comes up for renewal.
The main benefit of having your financing statement registered on the PPSR is that, if your customer goes into liquidation or has receivers appointed, your goods will not be available to the general body of unsecured creditors. As a secured creditor, you can take back your goods (provided they have not yet been paid for) or, if your goods have been sold, you can trace into the proceeds of sale of your goods (when your goods are paid for by a third party).
If you don’t register your security interest on the PPSR and another creditor has been given and registered a General Security Agreement (“GSA”), the GSA holder will have priority over your goods. We often deal with creditors who have registered their security interests on the PPSR too late, if at all, and have lost their priority in goods to other parties’ security interests.
It’s a good idea to review your internal PPSR procedures on a regular basis. If you think it’s time for a review or you want to discuss how you can use the PPSR to your best advantage, get in touch with the team at McDonald Vague.