Simon Read, founder of PPSAdvisory, is helping us unravel the mystery of the PPSA and why it’s so critical you appreciate its application to your business.
Don’t remember what PPSA is? Read our introductory blog: What is the PPSA series?
So, if the PPSA is all about security interests in equipment, assets etc, what part does it have to play in buying/selling a business or refinancing one? A BIG part.
Just think, the PPS register is an online notice board of other people’s security in property, assets, equipment etc.
If you’re thinking of buying a car from the guy you’ve just met in the pub, wouldn’t it be smart to search the vehicle (by its VIN) on the PPS register to see whether anyone is already claiming security over the vehicle (like the car’s financier)?
If you’re thinking of buying a trading business, a search of the PPS register must be a basic part of your due diligence.
After all, the PPS register is telling you of other parties’ potential security over the very equipment, goods, assets you’re about to buy.
If you’re selling a business, it’s critical to review the PPS registrations performed against you. You’ll need to explain them to the purchaser and arrange for the security to be released on settlement.
If you plan on providing finance you’ll want to make sure of your security position. The PPS register will let you know exactly where you’ll stand in terms of priority with other secured parties.
If you’re planning on refinancing your equipment, you’ll have to be able to explain any PPS registrations registered against it.
Please, if you’re intending any of the above activities, speak with one of the Thorntons team to determine how we may be able to help. It’s not going to cost anything to get an opinion.
PPSAdvisory are happy to help. Having conducted buy/sell and refinance due diligence in more than $400 million of transactions they understand the issues.
Please, please, please contact them at the beginning of the transaction. The PPSA is the number one contributor to settlement delay. The PPSA is often a major due diligence issue and can take significant time to resolve.
Please remember this is not legal advice, we are not lawyers and the information is provided for general guidance only. Readers should obtain confirming legal advice before acting.