The Personal Property Securities Register (PPSR) is a database of vital information for anybody looking to buy a vehicle, machinery, or another type of asset. 

It also plays an important role in Asset Finance. If you want to finance the purchase of an asset or refinance an asset your business already owns, the lender will check the PPSR before they agree to any funding. 

In this guide, we’ll break down what the PPSR is, what information it shows, and how it impacts Asset Finance. 

What is the Personal Property Securities Register (PPSR)?

The PPSR is an official government register that records all security interests on personal and business property. It includes everything from vehicles and machinery to financial contracts and trademarks. 

Here’s how the Australian Financial Security Authority describes the PPSR on its website:

“When someone registers a security interest on the PPSR, they are letting the world at large know that they claim to have a security interest over certain personal property. Personal property includes things like cars, company assets, boats, used goods and intellectual property; it doesn’t include land or fixtures.”

For a small fee, the PPSR can be searched by anyone to see if a security interest has been registered on an asset. It’s an essential tool if you plan to buy an asset, seek asset financing, or refinance assets owned by your business. 

Which Assets Can Be Listed on the PPSR?

A wide range of assets is registered on the PPSR. The only business assets and other personal property that cannot be included are:

  • Land
  • Buildings 
  • Fixtures
  • Water rights
  • Government-issued licences

The listed assets are divided into four main categories, each with sub-categories. 

Tangible Property

This category contains physical assets like vehicles, machinery, boats, etc. 

Intangible Property

Intangible property includes non-physical items like leases, intellectual property, and other intangible assets not considered financial property.

Financial Property

Financial property includes products and instruments used for transactions and agreements, including contracts, shares, chattel paper, etc. 

General Property

The last category includes all eligible assets that aren’t listed in the other three categories. 

What Details Can I Check With PPSR?

You can use the PPSR to check the information you need to know before purchasing an asset. 

This includes if there are any security interests on the asset and who is the rightful legal owner. You can also confirm a vehicle’s history to ensure it is not stolen or written off.

These insights can help you avoid purchasing assets with money owing against them or unsafe vehicles. It can also help you to pay a fair value for the asset you want to buy. 

Before you buy an asset, it’s important that you confirm there is nobody else with a claim to the property, including any remaining debt owed to a third party. 

How Does PPSR Affect Asset Financing?

The PPSR plays a significant role in Asset Finance. It increases the financing opportunities available to a business by expanding the range of assets that can be used as collateral. 

For example, a traditional business loan from a bank typically requires the applicant to use their property as collateral for the loan. With Asset Finance, lenders can check the PPSR and allow businesses to use vehicles, equipment, and other assets as collateral.

This makes it easier for businesses to access finance to buy equipment, especially as the asset being purchased can typically be used as collateral for the funding facility. 

If you want to use Asset Finance to purchase new or second-hand equipment for your business, the lender will need to register a security interest on the PPSR. 

Registering property on the PPSR is also important if you plan to use those assets as collateral to get business funding. Proactively registering your assets before reaching out to a lender can speed up the application process so you can access financing faster. 

Before an Asset Finance provider is willing to part with any funds, they will use the PPSR to see if there are any existing security interests registered on the asset. 

If there is a third party with a registered security interest, the lender may not be willing to offer funding. This is because these secured creditors will have priority if the owner cannot make payments and defaults on the financial arrangement.

When a lender agrees to fund an asset, they will register a security interest on the PPSR. 

What Are the Business Requirements for Asset Finance?

Asset Finance can help businesses get the vehicles and equipment they need to grow without making a large upfront payment. Instead, you can spread the cost over an extended period to improve cash flow management. 

While it is generally more accessible than other types of financing, you still need to meet requirements to qualify for Asset Finance. 

You can speed up the application process and increase your chances of approval by preparing up-to-date financial statements before reaching out to a lender. 

Some lenders have more stringent lending criteria than others. You should be prepared to demonstrate why you need the asset and how it will help increase growth and profitability. 

Which Types of Asset Financing Need To Be Registered on the PPSR?

Asset Finance is an umbrella term that covers a range of different solutions. It’s important to note that not all types of Asset Finance need to be registered on the PPSR.

Hire Purchase

With hire purchase, the asset is purchased by the financing company. The business can use the asset while making regular payments over a set term. At the end of the term, the company has the opportunity to buy the asset for a nominal fee. 

Hire purchase agreements need to be registered on the PPSR. The lender will be registered as the legal owner during the financing term. 

Equipment Finance

Equipment Finance is a flexible funding solution that can be tailored to the requirements of a business. Like a hire purchase, the company can use the asset while making regular repayments. You can return, purchase, or renew the lease at the end of the term.

Equipment Finance terms range from 24 to 60 months and need to be registered on the PPSR. The lender will be registered as the legal owner during the financing term. 

Operating Lease

An operating lease agreement is for businesses that need short-term use of an asset. The company will lease the asset and make regular payments over the financing term. Once the term is complete, the business usually returns the asset to the lender. 

Short-term operating leases of less than two years do not need to be registered on the PPSR.

Finance Lease

A finance lease differs from other Asset Finance types as it transfers ownership of the asset to the business. The lender will agree to provide funding so the company can purchase an asset. The financing is then repaid over a set term. 

Finance leases need to be registered on the PPSR. The lender will record a security interest on the asset until the business has repaid the financing in full. 

Asset Refinancing

Asset refinancing is a different type of funding solution. It helps businesses to access the capital they have tied up in the assets they already own. Using the asset as collateral, the company can raise funding to invest or increase working capital. The funding is repaid over a set term. 

Asset refinancing needs to be registered on the PPSR. The lender will record a security interest on the asset until the financing has been repaid.

Learn more about these different types of funding solutions and how they work in our guide, What is Asset Financing?.

Fueling Growth With ScotPac Asset Financing

Asset Finance providers rely on the PPSR to increase the number of funding options they can provide to businesses. You can use Asset Finance to fund everything from vehicles to machinery or to release the capital tied up in assets you already own. 

Here at ScotPac, we offer a range of asset financing options to help businesses like yours get the tools and funding they need to grow. Our award-winning finance solutions help our clients to grow at 3x the rate of the average Australian company.

If you need funding to purchase assets for your business, our team of Asset Finance experts are on hand to help. Give us a call or fill out an enquiry form, and we’ll be in touch to discuss your needs and find the right funding solution for you.