MAY 2014 | HIRE
AND
RENTAL
NEWS
| 23
INDUSTRY IN FOCUS
According toColin Porter,Managing
Director of CreditorWatch credit reporting
bureau, better thedevil you know.
“Theremay beno truer sentiment
when it comes to creditmanagement. If
businesses hada crystal ball to show them
the future for their creditor’s enterprises, it
could change their future,”Colin said.
“Andwith the complexities of the
Personal Property Securities Register (PPSR)
proving challenging (andpotentially
expensive) for thehire and rental industry,
it’s never beenmore important tohave a
watchful eyeon thehealthof your lessees
toprotect your business.”
Kim Powell, director of EDXAustralia,
PPS consultants said: “It is actuallymore
important tomonitor companies for a
change in status – for example, in the
appointment of liquidator, receiver or
voluntary administrator.
“Theappointment couldbepart of a
(legitimate)mechanism to sell thebusiness
assets of a financially troubled company
and it is desirable to contact the insolvency
practitioner early on in thepiece toalert
them to your interest,”Kim said.
“Evenwhere an imminent sale is not
contemplated, the insolvency practitioner
will normally bepreparing thebusiness
assets for sale – either as agoing concern
or closedown.While youmay have legal
rights if thepractitionerwrongly sells your
equipment, it is far better to avoid the
argument by alerting them early. Plus, you
maywant tonegotiateongoing rentals in
the interim.”
Colin said for hirebusinesses not
registeringagainst customers on the PPSR,
the riskof losing assetswhen customers
face insolvency is great.Worse, the rateof
companies goingbust is rising.
“Around 1,000 companies permonth
aregoing into administration. This level
isworryingly high, especiallywhen
you consider only 2%of businesses are
monitoring their customers’ credit files.
“A credit reportingbureau can alert
you if there’s been any investigation
or registrationof abusiness going into
administrationwith theAustralian
Securities and Investments Commission
(ASIC),”Colin said.
“You should alsoperform credit checks
Forewarned is forearmed
before youopen an account andhireout
equipment because youmight find the
customer has abad track record,”he said.
Since the introductionof the PPSR, and
the endof the limitedprotectiongranted
by the transitional period for transitional
security interests (TSI), thehireand rental
industry has beenonnotice.
“Inmany circumstances thehire
companywill be competing against banks
and finance companies that have taken
security over the assets of their customer.
Banks and finance companies are all up
to speedwith PPSA and if hire companies
donot take this seriously, it is not a level
playing fieldwhen it comes to insolvency.
“Therewas anold saying ‘possession is
nine tenths of the law’. In thepost PPSA
world, and the absenceof registration, one
could almost say ‘possession is the law’.”
CreditorWatch is a credit reporting
bureau and anonline community of
businesses that shares information
about baddebtors tomakebetter credit
decisions.
Visit:
or
contact: 1300 50 13 12.
HR
MAKINGHARDWORKEASIER
HealyGroup
-Manufacturers&Distributors
Tel (02) 95255522 -
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