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Businesses urged to get PPSR-savvy

Businesses urged to get PPSR-savvy

It turns 10 years old today, but too many small businesses still fail to understand the importance of the Personal Property Securities Register.

“It may have a dull name, but the PPSR is of huge importance to New Zealand businesses,” says Lawrence Wells, Business Registries Group Manager at the Ministry of Economic Development.

“By registering your security interests on the PPSR, you become a secured creditor and receive much stronger protection should your customer become insolvent. Unfortunately, too many small businesses only realise the importance of the PPSR when it is too late.”

In its 10 years the PPSR has seen 65,000 creditors register 5.7 million financing statements over personal property, including equipment, hire purchase agreements, livestock, machines and vehicles.

“For businesses lending equipment as part of leases and trade agreements, failure to register their interest in that property on the PPSR can be costly. If the customer goes into bankruptcy or liquidation, the business could lose any property they have provided,” says Mr Wells.

“Similarly, if you’re signing an agreement and your customer offers their property as collateral, check the PPSR first. In most cases it is a first-in, first-served system and if another business has already registered that property as their security interest, you’ll be out of luck should your customer go broke.”

The PPSR is also invaluable to consumers, says Mr Wells.

“If security interests are held against you, this can affect your credit ratings and ability to get a loan. It’s important to see whether details about you are up-to-date. If you’ve finished paying off a vehicle, for example, check the PPSR to make sure your lender has removed the security interest.

“If you’re buying personal property, such as a car, check the PPSR or use our TXTB4UBUY service to make sure no money is owing on it. It’s as simple as sending a text with the VIN, chassis or registration number.”

There are currently more than half a million security interests registered against motor vehicles. The PPSR is searched two million times every year to check securities owing on cars.


When should you use the PPSR?

• When you’re lending property.

• To help determine a customer’s creditworthiness.

• To check whether collateral has already been offered to someone else as security.

• Before buying a motor vehicle, especially when buying privately.

• To check whether financing statements registered against you are up-to-date.


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