When meeting with a new client this week we discussed his risk relating to security over his stock.
He provides coffee vending machines on a lease basis. The machines belong to his company and the customer has full use and pays for the consumables without the capital outlay.
Sounds like a win win for all? It is, but my client is at risk...
The Risk: My client may loose his valuable coffee machines, if something happens to his customer, as his machines are on the customers' premises.
Solution: Register the coffee machines on the PPSR - www.ppsr.govt.nz
The Personal Property Securities Register (PPSR) is an electronic register that allows security interests in personal property to be registered and searched in accordance with the New Zealand Personal Property Securities Act 1999. The New Zealand PPSR is maintained by the New Zealand Companies Office, an agency of the Ministry of Economic Development.Being on the PPSR you can take back any products for which you have not been paid and you 'rank' above unsecured creditors for payment if the need arises.
You do not need to register for every customer but assess your risk of how much 'loss' you can comfortably carry before it materially affects your business. The PPSR is used strongly in the building and the building supply industry.
Many small businesses do not know the PPSR exists and only find out when it is too late.
Other reasons to use the Personal Property Securities Register
- Check before property is offered as collateral.
It's first in first served so make sure no one else already has an interest on the property.
- Check that no money is owed on a vehicle before you buy, otherwise you could land up paying the seller and the interested party.
- If security interests are recorded against you, keep your details up to date.
Searching the PPSRThere are many different reasons why you might want to search the PPSR.
If you want to conduct a search on the website, you will have to be a registered user.
A secured party is likely to search the PPSR as part of the process leading up to entering into a security agreement.
Consumers may search the PPSR before buying an item of personal property to check that there is no money owing.