The new national PPSR, which commenced today, will allow lenders and businesses to register their security interests, replacing several state-based registers.
According to Veda – which provides commercial and consumer data intelligence and insights –the PPSR signals “a new era” for businesses, so they need to ensure they are up to date with the changes.
“The PPSR brings great opportunity, but organisations need to ensure that they understand the changes to their business practices,” says Moses Samaha, head of commercial risk at Veda.
“By registering your security interests on the PPSR, your business will be at a lower risk from the bad debts of partners and suppliers.”
“And it will better your business’ position in the list of creditors in the event of insolvency or liquidation.”
Veda says in order for businesses to take advantage of the new register, there are three stages they must go through: review, prepare and “take charge”.
In addition to reviewing trading activities and business documentation, businesses should evaluate their current credit policies and processes.
“You may not want to register and search the PPSR register for all debtors. Take the time to think through your risk strategies and evaluate how you are working to get the most out of the new legislation,” Veda says.
Veda also encourages businesses to train their staff so they understand the changes, and check IT and credit management systems.
“Make sure that they enable the collection and storage of information required for the PPSR such as party details, collateral descriptions and other data required to register and maintain security interests,” it says.
Businesses are then advised to prepare, which includes seeking legal advice, identifying which assets need to be registered on the PPSR, collecting accurate information and validating the data.
As part of the “take charge” stage, businesses are encouraged to “take market advantage”.
“For non-financial institutions, the PPSR will have a number of benefits and bring a level playing field when it comes to registering security assets, putting smaller businesses on par with the big players,” Veda says.
“The PPSR can better your position in the list of creditors in case of insolvency or liquidation, and it will help you take control and manage security from your debtors.”
“The PPSR… also holds a number of advantages for consumers. If you are looking to buy used goods, such as a car or boat, the PPSR can help you verify that there is no security interest registered on it.”
“Searching the PPSR will help protect you from buying goods which could be repossessed.”