If you are doing business in New Zealand, or are planning to, then you might seriously want to consider taking advantage of the Personal Properties Security Register and searching their database. The PPSR is a government initiative and is a Personal Property Securities Registrar. It can be used for businesses to record their security interests – such as loans and credit with other businesses – as well as being a database you can search for information on the current credit situation of a company you might be planning to deal with.
Let’s now take a look at some key reasons why it is beneficial to do a PPSR search in New Zealand.
#1 – You Need To Learn More About a Potential Customer
No matter what business you’re in, if it involves extending any form of credit to your customers, then you’ll want to know exactly who you’re dealing with and what their credit situation is like before doing business with them.
A company might be going into receivership, or have outstanding, unpaid debts to other creditors. You can discover this information with a simple PPSR database search.
#2 – Ensure Your Own Debts Have Been Cleared
If you are a debtor, but have finished paying for the item or service on which you owed money, you can do a search of the Personal Properties Security Register to ensure the secured party has acknowledged full payment of your debt and has removed that entry from the database. If not, this could affect your credit rating and the ability to secure credit and loans in the future. It’s always wise to perform regular checks for your own peace of mind.
#3 – Check a Debtor’s Collateral
This means you can search the Personal Properties Security Register database to determine if collateral being offered your company against a loan or line of credit hasn’t already been offered to another creditor. This safeguards you against accepting collateral that would prove to be null and void in the event that the creditor’s debt to you wasn’t paid.
The collateral they are offering might also have security interests attached to it, as in the equipment is still under finance to another creditor, so the Personal Properties Security Register database will offer you this information as well.
#4 – You’re Looking To Purchase Used Business Equipment
When equipment is second hand, you need to be certain that whoever originally made the purchase didn’t buy it through a loan or credit, and if they did, has the equipment been paid for in full?
The danger arises when you buy expensive equipment, only to discover down the track that the previous owner didn’t actually own it because they hadn’t paid all the money owing. Your business could then be liable to pay the outstanding balance, or risk having the equipment repossessed.
You can search the financing and credit history of those security interests on the Personal Properties Security Register, as well as searching to determine that a vehicle you plan to buy also doesn’t have money owing.
The Takeaway
The Personal Properties Security Register exists as a safeguard for creditors which enables you to register your own security interests, whilst also determining if a person or organisation is safe to do business with and what their current and historical credit history is like.