Veda has outlined the following seven business benefits of correctly securing interests on the PPSR:
- Protection of title: Effective registration of security interests by leasing companies mitigates the risk of losing assets in the event of lessee insolvency.
- Proactive risk management: Businesses that previously did not attempt to secure their receivables can now amend customer contracts to leverage new security positions by registering security interests.
- Improved business efficiency: During the pre-load period (22 August 22 to 30 September 2011) companies can bulk upload data. From 10 October 2011, only companies with access to a business-to-government interface such as the service provided by Veda Advantage, will be able to continue bulk loading. Companies uploading data via the web-based interface will have to upload each entry separately.
- Insolvency protection: Security interests lodged on the register will obtain legislative security and priority, with the potential to be moved up the payment priority queue in the event of debtor default or insolvency.
- Improved asset valuation: Many small-to-medium businesses may find it easier to use their assets (the account receivable) to find and secure financing.
- Dividend increases: Under the current system, in the event of insolvency, unsecured trade credit providers receive only a few cents in the dollar, or nothing at all. However, if securities are registered correctly on the PPSR it could mean a significantly increased dividend from the insolvent estate.
- Improved credit and data quality: Credit quality is one of the most important issues under the Personal Properties Security Act and is closely linked to effective registrations, which rely on quality data.
"The clock is ticking and companies wanting to adopt best practice credit and risk management are acting now to ensure their security interests are correctly loaded. These companies are getting on the front foot by understanding the legislation and how they can turn this into cost savings and strategic initiatives" Hamish Osborn, Veda
© 2011 Veda Advantage
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