Thursday 7th September 2017

5 questions to ask yourself when considering your Personal Property Securities Act (PPSA) potential risk.

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Does your business provide services, goods, hire equipment or materials on credit?

If you do then the PPSA will likely apply to your business and you should benefit from compliance.

Do you work or have clients in “risky” industries such as construction, mining supply or equipment hire?

Having PPSA registrations in place greatly increases your chances of getting paid and recovering your equipment.

Are you considering an expansion or sale of your business?

Robust PPSA procedures and compliance lessens your risk profile to lenders meaning easier and cheaper borrowing. Potential purchasers appreciate the value in having risk management procedures in place.   

Have you ever been told by a customer or client that they were considering liquidation / bankruptcy and were unable to pay for your goods or services at that time?

Being PPSA compliant helps your chances of recovery when these statements are actually true and lessens the likelihood of payments you do receive being taken back by a liquidator as a “preference payment”. With the correct trading terms and PPSA registration, payment for services can be secured – not just goods!

Do you feel that your business insurance premiums are too low?

PPSA compliance at $6.80 per client for 7 years’ cover is the cheapest insurance you will ever get and covers you for the risk of your client or customer becoming insolvent when owing you money or holding your goods. This is often a greater risk than fire or theft and your other policies will probably not cover the risk of your client becoming insolvent.

If the above raises any further questions for you please contact our office on 9387 5637.

 

Source: Hamish Scott, Everest Legal

 

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