General security agreements and the PPSR, explained

Property lending is built on land titles. Everything else a business owns — its vans, machines, stock and invoices — is secured through a different system: security agreements registered on the Personal Property Securities Register. This entry explains how that system works and why it matters whether you’re borrowing, buying or selling.

What is the PPSR?

The PPSR is the national online register where security interests in personal property are recorded and searched. It began operating on 30 January 2012, replacing a patchwork of state and Commonwealth registers — including the old registers of company charges, bills of sale and encumbered vehicles. It runs around the clock, and anyone can search it for a small fee.

“Personal property” here means almost anything that isn’t land or buildings: vehicles, equipment, stock, livestock, crops, receivables, intellectual property, shares and more.

What is a general security agreement?

A GSA is a contract in which a business (the grantor) gives a lender (the secured party) security over its personal property. It can be:

• All-assets — covering all present and after-acquired property of the business.
• Specific — covering particular assets, such as a fleet of vehicles or a class of receivables.

Once the GSA is signed, the lender registers a financing statement on the PPSR. That registration is what makes its interest effective against other creditors and, if the business becomes insolvent, against a liquidator or administrator.

How does priority work?

When more than one lender claims the same asset, the PPSA sets rules for who ranks first. In broad terms:

Situation	Who usually ranks first
Two registered security interests over the same asset	The one registered first
Registered vs unregistered	The registered one
A correctly registered PMSI vs an earlier GSA	The PMSI, for that specific asset
Retention of title supplier, correctly registered	The supplier, for its unpaid goods

The purchase money security interest (PMSI) rule is why an equipment financier can take first-ranking security over a new machine even though your bank already holds an all-assets GSA. It’s also why suppliers register their retention of title terms.

Lenders can change the order by agreement, using a priority or subordination deed — common when an invoice financier and a bank both deal with the same business.

Why does a PPSR search matter?

Search before you:

• Buy a used vehicle or equipment privately. If the seller’s financier has a registered interest, it may be able to follow the asset.
• Buy a business. business.gov.au recommends checking for outstanding debts and liabilities registered on the PPSR as part of due diligence. See business acquisition loans.
• Apply for invoice or equipment finance. An existing all-assets GSA may need a release or priority arrangement.
• Sell assets or refinance. Old registrations from repaid loans can slow things down if they weren’t removed.

How does a GSA affect future borrowing?

A new lender will see any existing GSA on a PPSR search. It isn’t a barrier in itself, but the new lender may need:

• consent from the existing secured party;
• a priority deed setting out who ranks first over which assets;
• the old registration removed if the debt it secured has been repaid.

If you’re not sure what’s registered against your business, a PPSR search on your own ABN or ACN is a sensible first step before applying for new finance.

Which products typically involve PPSR registrations?

Product	What’s usually registered
Equipment finance	The specific vehicle or equipment (often as a PMSI)
Invoice finance	The receivables being funded, sometimes all present and future receivables
Trade finance	The goods funded, or a wider GSA
Bank business facilities	Often an all-assets GSA
Many unsecured loans	Sometimes nothing, sometimes a GSA — check the offer

Knowing what’s registered, and by whom, makes it much easier to plan the next facility.

What should you do after repaying a secured loan?

Ask the lender to remove its PPSR registration and, for property, to discharge its mortgage or withdraw its caveat. Then check. Old registrations can linger, and they show up at inconvenient moments — when you apply for new finance, sell equipment or sell the business.

Terms used in this entry

• Security interest — a legal interest that secures payment or performance of an obligation. Glossary →
• PMSI — security given to the financier of a specific asset. Glossary →
• Retention of title — a supplier’s claim to goods until they’re paid for. Glossary →
• Encumbrance — any registered claim against an asset. Glossary →

Worked example (illustrative)

Illustrative only. A building company’s bank holds an all-assets GSA, registered years ago. The company now wants invoice finance to fund wages on a large contract. The invoice financier’s PPSR search shows the bank’s registration covers receivables.

The invoice financier asks the bank to sign a priority deed giving it first-ranking security over the invoices it funds, while the bank keeps first ranking over everything else. The bank agrees because the facility improves the company’s cash flow. Raising the GSA at the start meant the deed was organised in parallel with the approval, rather than delaying settlement.

Want finance that works with your existing security?

Existing registrations shouldn’t stop you getting the right facility; they just need to be handled properly. Enquiring takes about 60 seconds and there’s no credit check when you first enquire. Your details aren’t pushed out to a pile of lenders — a real person looks at your current facilities and calls you. Please list any existing lenders and security as accurately as you can so we can plan the right structure first time.

See if you qualify →