Veda reveals SMEs are at risk of significant financial losses due to lack of awareness and understanding of the Personal Properties Security Register

Sydney, Australia: 4 April 2013: At a recent industry forum hosted by Veda, Asia-Pacific's leading provider of consumer and commercial data intelligence and insights, industry stakeholders claimed Australian small businesses are at risk of significant financial losses due to a lack of awareness and understanding of the Personal Properties Security Register (PPSR).

Speaking recently at Veda’s PPSR 12 Months in Review, 12 Months Ahead Forum, representatives from Veda, Commonwealth Bank, ANZ Bank, Gadens Lawyers, the Australian Institute of Credit Management and Insolvency and Trustee Service Australia urged Australia’s SME sector to begin using the PPSR or run the risk of learning the hard way when suppliers get into financial difficulty.

Carol Chris, Veda’s General Manager of Commercial and Property Solutions revealed that just 11 per cent of Australian SME’s are using the PPSR database to search for and register security interests.

A lack of general awareness on what the PPSR is, combined with a lack of knowledge of how the system operates, were cited as the main barriers to adoption within the SME sector.  Other factors which are contributing to the limited use of the system include a prevalence of conflicting advice from parts of the legal sector due to a lack of detailed understanding.

Failing to register interests on the PPSR holds significant risks for SME’s according to Veda’s Carol Chris.

“By registering security interests on the PPSR, small business will be at a lower risk from the bad debts of their partners.   Registering on the PPSR also betters the position of businesses in the list of creditors in the event of insolvency or liquidation.

“Registering your interests on the PPSR should be an integral part of good practices in credit management but it is clear that this is not happening within Australia’s small business sector,” said Ms Chris.

While big banks and larger businesses have adapted well, smaller businesses are not protecting their interests adequately.  The panel shared insights that some SME’s continue to rely on handshakes and verbal agreements in place of formal protection measures.

By failing to register security interests on the PPSR, SME’s risk dropping down the pecking order behind banks and big business when trying to recover their debt in the event of their debtor going into liquidation.

While acknowledging that the PPSR system is complex, the panel advocated for the legal and financial industries to take a proactive approach to educating the SME sector and the broader market on the benefits of the PPSR.

As part of their PPSR offering, Veda develops bespoke solutions that allow businesses to quickly and easily search and upload entries to the PPSR, saving them both time and money by removing the need for businesses to manage this process in-house.

-ENDS-

About Veda
Veda is Asia Pacific's leading data intelligence and insights company and has been at the forefront of the information services industry for many decades.

Veda is built on the largest, most comprehensive and current data source in Australia and New Zealand. We hold more fit-for-purpose credit data than any other organisation in Australia and New Zealand. With information on over 19.4m credit active people and 4.2m companies and businesses in Australia and New Zealand. The breadth and depth of our data, and the knowledge it delivers help customers take a proactive and informed approach in making decisions.

Veda serves a diverse range of markets including large financial institutions, small to medium sized enterprises, and consumers. We provide services in areas of Consumer Credit Risk, Commercial Credit Risk, Credit Analytics, Data Solutions, Fraud and Electronic Verification, Insurance, Automotive, Customer Location Services and Commercial Information Brokerage.

About the Personal Property Securities Register (PPSR)
The PPSR is a national commercial law on secured finance involving personal property, bringing together 26 different Commonwealth, State and Territory laws and registers under one national system, the Personal Property Securities Register (PPSR).

The PPSR is one of the biggest changes impacting the credit industry in the last two decades, bringing significant changes to existing Australian business practices, from commercial lending and trade credit, to leasing, legal and professional services.
The PPSR makes it significantly easier for businesses to protect their interests in the event of their business partners and suppliers going into liquidation.

About Veda’s PPSR 12 Months in Review, 12 Months Ahead Forum
The cross-industry event examined insights into how the PPSR has fared in the first 12 months of operation.
Keynote speaker: Gavin McCosker, COO, Insolvency and Trustee Services Australia
Panellists:
 - Anthony Walsh, Senior Associate, Gadens Lawyers
 - Cindy Bushell, Program Director, ANZ Bank
 - Del Cseti, National Training Manager and Manager External Affairs, AICM
 - Bronwyn Yam, General Manager of Asset Finance, Business & Private Banking, Commonwealth      Bank
- Alex Beck, PPSR Product Manager, Veda