When it comes to managing business risks, especially around getting paid and safeguarding your valuable assets, prevention is always better than cure. Recently, we hosted an informative webinar titled “Secured or Sorry? How to Protect Your Business Assets When a Client Goes Bust”, featuring Lynne Walton, PPSR expert and founder of Access Intell, a platform dedicated to simplifying PPSR registrations.
But if you missed it, here’s what you need to know:
What is the PPSR?
The Personal Property Securities Register (PPSR) is an online Australian government register where businesses can officially record their security interests in personal property. Essentially, your goods or equipment that customers haven’t yet paid for or items you lease or rent out.
Having a valid registration on the PPSR gives you secured creditor status, which can be critical if a client becomes insolvent. Without PPSR protection, your business risks significant financial losses.
Who Needs to Register?
The PPSR is especially important if your business:
- Supplies goods on credit terms.
- Hires, leases, or rents out equipment.
- Finance assets used by clients.
A wide range of industries and businesses frequently benefit from PPSR registrations.
Key PPSR Insights
During our recent webinar, Lynne provided several essential PPSR insights:
- Retention of Title (ROT): Clearly stated ROT clauses are essential to claim goods in case of client insolvency.
- PMSI (Purchase Money Security Interest): A PMSI gives your business priority over general security interests, significantly enhancing your chance of recovering your goods or payments.
- Reduced Legal Disputes: PPSR acts as a public record, reducing uncertainty and strengthening your position legally in disputes or insolvency situations.
- Peace of Mind: Proper PPSR usage provides confidence in business dealings, knowing your assets are securely protected.
- Real-life Consequences: Lynne shared powerful case studies, including a business that lost $3 million due to an expired PPSR registration and another that successfully defended its claim due to properly documented registrations and timely action, resulting in a significant payout.
The Importance of Proper Contracts
Simply wanting to register isn’t enough. Your customer agreements and terms and conditions must explicitly include retention of title or security interest clauses. These clauses form the foundation that legally permits you to register your interest on the PPSR. Without them, your PPSR registrations may not be enforceable, leaving your assets vulnerable.
Some Common Mistakes Businesses Make:
- Outdated Registrations: Forgetting to renew can invalidate your protection.
- Incorrect Registrations: Even small inaccuracies, like incorrect debtor or asset details, can void your PPSR protection.
- Missing Clauses: Failure to properly integrate retention of title clauses into your contracts.
- Timing Issues: Missing the required timing for priority registration, especially for PMSIs.
How Can Optimum Recoveries and Access Intell Help?
At Optimum Recoveries, alongside our legal partners, we specialise in reviewing your contracts and ensuring your documents contain the necessary clauses for enforceable PPSR registrations. Our expert guidance ensures you’re legally covered and properly secured.
Through our collaboration with Access Intell, businesses also benefit from automated, efficient PPSR registration and monitoring solutions. Their system provides:
- Centralised registration management.
- Early alerts for renewals, so your protections never lapse.
- Expert PPSR guidance and support.
Don’t Leave Your Business Unprotected
Taking proactive steps today can protect your business tomorrow. To ensure your documents are PPSR-ready or to streamline your PPSR registrations and management, reach out to Optimum Recoveries for a no-obligation discussion.
Remember – secured is always better than sorry.
