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Financial services

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What may be affected? : 

  • selling or buying shares and other investment products whether for your business or for third parties
  • dealing in or lending on debts (book debts or account receivables)
  • lending on security over any type of goods or assets – except for land, buildings and fixtures
  • financing vehicle fleets or stock, or other equipment.

What is not affected?: 

  • land, buildings and fixtures
  • pawnbroking
  • security over superannuation policies, annuities and retirement savings accounts
  • close-out netting contracts and arrangements.

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How does it benefit my business?: 

What may be affected? Important note

The list above covers the most common types of financing activity but larger and more specialist lenders or financial service providers may be affected by the PPS Act and PPSR in other ways. 

For example, banks and other Authorised Deposit-taking Institutions (ADIs) may take security over their customers’ accounts, or provide letters of credit; other providers may facilitate margin lending, foreign exchange or derivative transactions or other options; sales of shares may occur through intermediary (broker) accounts, or there may be financing through managed investment trusts.

Transactions over these types of collateral may involve security interests under the PPSA but banks and larger/specialist financial institutions will have their own expert advice.

Protection when lending

If you are lending or giving credit over affected personal property, the PPSR enables you to register your security interest to give you the best priority position and best position should your debtor go broke, and so that others dealing with the debtor or the property can search and find your interest.

An effective risk management tool

The centralised nature of the PPSR enables businesses, including the finance sector to readily assess risk in extending credit or offering finance against anything other than land. 

Whether it’s your local business looking for a credit account at the local hardware store; someone wishing to buy a car on finance; or one of the ASX top 100 companies wishing to access finance, you can manage it all at the PPSR.

Increased financing options

The PPSR has significantly broadened the forms of personal property over which security can be taken, from cars to crops and includes a wide variety of intangible assets, such as shares and other investment products, currency, and monies held in bank or other accounts or debts. 

Essentially, anything you can imagine can now be used as collateral for large or small business, companies, partnerships or sole traders in order to gain access to finance to help them grow their business.   

Invoice discounting and debt factoring are enabled because – provided certain notice is given – the PPSA gives those advancing funds on the strength of the borrower’s invoices/debts, the ability to obtain priority over other registered security interests linked to those invoices/debts.

Driving innovation

The PPSR is helping to drive innovation in the financial sector and has become an integral part of FinTech’s peer-to-peer lending offering, who are now able to offer secured loans across a broader range of collateral. 

The online PPSR is the first national system of its kind in a federated country.