If you are a business that provides credit to your business customers then you need to know about new laws to commence next year that will change your terms of trade.

Whether you provide goods on a deferred payment basis, on consignment, supply on a “retention of title” basis, lease equipment or finance inventories or receivables, the Personal Property Securities Act will change the way you manage your credit risk.

If you obtain credit on the basis of a negative pledge relating to your assets or obtain finance for your inventory you will also be affected.

PPS will enable registration of a security interest in all types of property other than real estate, such as for cars, aircraft, boats and livestock. It will also permit registration of a security interest in collateral not currently regulated, such as intellectual property and consigned goods.

Failure to register an interest may mean that you lose priority for payment to another creditor.

The new law will set up a national register of personal securities and change security types and procedures. From May 2011 it will replace more than 70 different pieces of Commonwealth, State and Territory law and more than 40 existing registers. Security interests will be able to be searched easily on one online database.