Whenever a business considers lending money or selling goods it should consider whether it might be worthwhile to protect that lending with a personal property security, such as a PMSI. This will place the business in a much better position if the debtor goes bust. However, if you are creditor (or former creditor) and end up receiving a demand from a liquidator relating to an unfair preference, don’t despair.
In article: When a business provides finance or goods or services on credit, they need to consider how best to protect themselves from non-payment by their debtor. One important way of doing this is by registering a personal property security.…
The Personal Property Securities Act (PPSA) has implemented a single national register that applies to all personal property security interests. The PPSA has also provided us with a set of priority rules to determine disputes between competing security interests. Of particular note is the Purchase Money Security Interest (or PMSI). A PMSI is a security […]
With inflation and interest rates on the rise some of your customers may be looking for ways to manage a liquidity squeeze. Unfortunately, those customers may see their trade suppliers as an “alternative financier” and may either extend your trading terms or indefinitely delay payment to ease […]
When you lend money, or offer goods or services on credit, how do you protect your interest in the case of non-payment of the debt? In this article, we consider how you might secure this debt with an interest in land. Key mechanisms for doing this are via a ‘charging clause’ in a director’s personal guarantee, and/or via registration of a mortgage.
A personal guarantee is a promise by a person to be answerable for a debt or obligation of another person/entity in the event that person/entity defaults. Seeking personal guarantees from directors is a common way for SMEs to limit their risk in commercial credit arrangements with other SMEs.
When a business hits rocky times the directors of SMEs need to develop a clear business strategy. What is your end game? Business continuity or business exit?
All businesses that provide goods or services on credit should ensure that their credit application process protects their position in the case of non-payment, as much as possible.