PPSR and general security agreements: what a lender's security over your business means

When a lender takes security over business assets other than land, it usually does so through a general security agreement (GSA) and registers its interest on the Personal Property Securities Register (PPSR) under the Personal Property Securities Act 2009. A GSA often covers all present and after-acquired property (ALLPAAP): equipment, vehicles, stock, debtors, intellectual property and future assets. Registration gives the lender priority over later creditors, which is why a second financier will often need the first lender's consent or a priority deed. Search the PPSR for your own business before applying for new finance, and remove registrations that should have ended.

This guide is part of business loan mistakes to avoid. General information only.

Key terms

The PPSR is administered by the Australian Financial Security Authority (AFSA). Land is not covered: mortgages over real property are registered with state and territory land titles offices.

How priority works

As a general rule, between competing perfected security interests, the one perfected (usually registered) first has priority. A properly registered PMSI is an important exception: an equipment financier who registers a PMSI on time can rank ahead of an earlier ALLPAAP registration for that equipment.

Worked example (illustrative):

• 2023: The bank lends $200,000 and registers an ALLPAAP GSA over the company.
• 2025: The company buys a $90,000 excavator with a chattel mortgage. The equipment financier registers a PMSI over the excavator within the required time.
• 2026: The company wants invoice finance and approaches a debtor financier.

Outcome:

• The excavator: the equipment financier has priority because of its PMSI.
• Receivables: the bank's 2023 ALLPAAP covers them. The debtor financier will want the bank to agree, through a priority deed or a release of receivables, that the debtor financier ranks first over invoices it funds. Without that, it may decline.

If the company had negotiated a GSA that excluded receivables, or had asked the bank in 2023 whether it would consent to future invoice finance, the 2026 application would have been simpler.

Searching the PPSR

You can search the PPSR online:

• by grantor organisation: using the business's ABN, ACN or other identifier, to see who has registered against it;
• by serial number: for motor vehicles, watercraft and some other serial-numbered goods, which is essential when buying used vehicles and equipment.

A search shows registrations, not the underlying agreements. Searching your own business before applying for finance lets you explain or clear registrations a new lender will see. There is a small government fee for searches; check the current fee on the PPSR website.

Clearing old registrations

Registrations often remain after a lease or loan has ended. Common examples: finished equipment leases, a supplier's retention of title registration after you stopped buying from them, or an old bank GSA after refinancing.

1. Write to the secured party asking it to end or amend the registration.
2. If it does not act, the PPSA provides an amendment demand process through the PPSR, which can lead to the registration being removed if the secured party does not respond or does not justify it.
3. When refinancing, make discharge of the old registration part of settlement.

Suppliers' retention of title

Many suppliers' terms of trade include retention of title clauses (you do not own the goods until you pay) and they may register on the PPSR to protect that interest. These registrations can compete with your bank's GSA over stock. Lenders reviewing your PPSR search will ask about them.

What a GSA means in a default

If the business defaults, a secured party with a GSA may have rights under the agreement and the PPSA to take possession of and sell collateral, or to appoint a receiver. These rights depend on the contract, notice requirements and the law. If a default notice arrives, get legal advice immediately. See covenants, defaults and reviews.

Checklist

• Search the PPSR against your ABN/ACN before applying for finance.
• Ask whether any proposed GSA is ALLPAAP, and what it excludes.
• Plan for future finance: equipment, invoice finance, supplier credit.
• For used vehicles or equipment, search by serial number before paying.
• Clear expired registrations; use the amendment demand process if needed.
• Keep copies of every security agreement you sign.

Frequently asked questions

Does a GSA cover my personal assets?

A GSA given by a company covers the company's property. Your personal assets are exposed through any personal guarantee and any mortgage you give personally. See personal guarantees.

Can I sell equipment covered by a GSA?

Many GSAs restrict selling assets outside the ordinary course of business without consent. Check the agreement before selling.

Is a PPSR registration the same as a debt?

No. It records that a security interest may exist. A registration can remain after the debt is paid, which is why clearing old ones matters.

Who can see PPSR registrations against my business?

PPSR searches against organisations are publicly available for authorised purposes, so lenders and suppliers commonly search them.

Sources

• PPSR — searching, registering and amendment demands
• Australian Financial Security Authority — administrator of the PPSR
• Federal Register of Legislation — Personal Property Securities Act 2009
• business.gov.au — protecting your business with the PPSR