You may have been surprised to learn that the PPSA can impact on family arrangements. In a similar vein, related party loans can be secured against all of an individual’s present and after-acquired personal property or one of the new types of personal property, such as intellectual property. From the perspective of a mum or dad lender, a loan on commerical terms supported by security is likely to tip the scale in favour of the loan being genuine for the purposes of establishing that person’s asset position. Where no real property or traditional business assets are held by the borrower (say, your 20 year old son), the PPSA provides an opportunity for security where previously none may have been available or registerable (eg. you could take security over iPhone apps developed by your son).
Take out lessons:
In the family context, a variety of factors will determine whether you choose to document a loan. Where a loan is given and security is appropriate, the PPSA may be relevant (even though you are not a bank…!).
Conversely, if a family member (or other individual or entity) seeks a loan from a bank and you are asked to provide a personal guarantee, you should beware of the terms of that guarantee so that you do not inadvertently grant a security interest over your property.
For further information, please contact: Nicola Young, B2B Lawyers, +61 3 8602 4000, email@example.com
What better way to learn more about a visual platform than seeing it in action? Register for an Encompass webinar, watch previous webinars and explore the world of commercial information management.