What security do I need to provide for an invoice finance facility?

Usually your lender doesn’t require personal assets for security.  They fund your business by taking the following:

A General Security Agreement (GSA) – This is a registered charge that sits on your business.

A Factoring Agreement – This is a contractual agreement assigning all of your invoices to us while defining the rules of the facility.

Personal Guarantee – Personal Guarantees will be required from directors and in some cases shareholders who are not directors.  As we only fund to the value of invoices, this guarantee will only be called on in an instance of fraud or default.

What security is required?

As the name indicates, no security is taken for an unsecured loan.  There is a loan agreement with the company and a guarantee by its principals.   

Nothing is loaded on the PPSR for an unsecured loan.

For a secured loan security may include a specific security agreement over certain assets, a general security agreement over the company or a mortgage over property. 

What is the PPSR?

The PPSR (Personal Properties Security Register) is a central register of all the security interests in companies and individuals. The PPSR is managed by the New Zealand Companies Office.

Every time security taken for a loan this is registered on the PPSR at www.ppsr.govt.nz. This ensures that the same security cannot be used for a loan twice and enables the lender to take possession of the security and sell it in the event of a default.