01
No search at all
The dominant failure. Private sales between businesses that know each other are where it happens, because the informality that makes the deal pleasant is the same informality that skips the check.
Guide
The register that decides who owns a financed asset.
Almost every asset finance facility in New Zealand is recorded on one public register. Understanding what it records, and what it does not, is the difference between buying a machine and buying somebody else’s debt.
MS
Matt Stiles Editor
Published 8 September 2026 Last reviewed 8 September 2026 Read time 12 min
The short version
Five lines that cover the ground.
- A security interest attaches to the asset, not to the person. It travels with the machine. Selling the machine does not, by itself, remove it.
- The register is public and searchable. Anyone can search the PPSR against a serial number or an organisation before money changes hands.
- It records security interests, not title. A clear search is strong evidence that nothing is registered. It is not a certificate of ownership.
- Registration is about priority. Where two financiers have an interest in the same asset, the register is largely what decides which one ranks first.
- Indicative only. This describes a mechanism in general terms. Any specific transaction is a matter for a solicitor, and every figure here is illustrative.
The mechanism
Why a financier will lend on a machine at all.
A lender assessing an unsecured facility is looking at one thing, which is whether the business can pay. If it cannot, there is nothing to fall back on and the price of the money reflects that. Secured asset finance works differently because the lender has a second position to retreat to, and the register is what makes that second position real.
When a financier registers a security interest over a specific machine, it puts the world on notice that the machine answers for a debt. The obligation does not sit with the borrower alone. It sits with the item, identified by serial number where the item has one, and it stays there until the financier files the change statement that discharges it.
That is the whole reason a business with a two-year trading history and a thin balance sheet can borrow $80,000 against a machine at a rate that would be impossible unsecured. The register converts a physical thing into collateral a lender can rely on, and the price of the facility reflects the strength of that reliance.
Attaches to
The asset
Survives
A sale
Searchable by
Serial or organisation
Removed by
A financing change statement
The distinction that matters
A register of interests, not a register of owners.
The most common misunderstanding about the PPSR is that a clear search proves the seller owns what they are selling. It does not, and the difference is worth being precise about. The register records that a financier has claimed an interest in an item. It does not record who holds title, it does not verify that the item exists, and it does not confirm that the person offering it for sale has any right to do so.
What a clear search does prove is narrower and still valuable. It shows that no financier has taken the step of registering against that serial number, which in practice means no financier is relying on that machine as security. Because registration is cheap, routine and in the financier’s own interest, an unregistered interest over a commercial asset is uncommon. A clear search is therefore strong evidence, and it is not a guarantee.
The practical consequence is that a search sits alongside the other checks rather than replacing them. Confirming the serial number on the machine matches the one on the invoice, confirming the seller is the entity named on that invoice, and confirming the item is where the seller says it is are all separate questions the register cannot answer.
How it works
Three steps, from facility to discharge.
01
The financier registers
On settlement of a hire purchase, chattel mortgage or secured asset loan, the financier files a financing statement describing the collateral. Where the asset carries a serial number, such as a vehicle, a boat or an aircraft, that number is recorded and becomes the way the interest is found by anyone searching later. Serial-numbered goods are the strongest case for the register, because the search key is unambiguous.
02
The interest sits against the asset
For the life of the facility the registration is public. A prospective buyer, another financier, or an insurer can find it in a search costing a few dollars. It does not restrict the borrower’s use of the asset in any practical sense, and it does not prevent a sale. What it does is ensure that anyone who looks will see the obligation before they commit.
03
The financier discharges it
When the facility is settled, the financier files a financing change statement removing the registration. This step is administrative and it is occasionally slow, which is the source of a good deal of avoidable friction. Where an asset is being sold on the strength of a recently settled facility, confirming the discharge has actually been filed is a five-minute exercise that avoids a much longer one.
What a search shows
The fields on a registration, and what each one tells a buyer.
A search result is short. Reading it properly takes a couple of minutes and answers most of the questions a buyer of used plant actually has.
| Field | What it means | Why it matters to a buyer |
|---|---|---|
| Secured party | The financier claiming the interest | Identifies who has to be paid or who has to consent |
| Debtor | The party who granted the interest | Should correspond to the entity selling the asset |
| Collateral description | What the interest covers | A specific item, a class of goods, or all present and after-acquired property |
| Serial number | The identifier for serial-numbered goods | The number that must match the plate on the machine |
| Registration date | When the interest was filed | Relevant to priority where more than one interest exists |
| Expiry | When the registration lapses if not renewed | A lapsed registration is not the same as a discharged one |
Field names are indicative of what a search returns. The register itself is the authoritative source.
The two live situations
Buying used plant, and selling something still financed.
Buying
Where the risk lands on the purchaser.
A private sale of used plant is the classic case. The seller is genuine, the machine is sound, the price is fair, and there is still a registered interest against the serial number because the seller’s own facility was never settled.
Where the interest survives the sale, the financier retains a claim against the machine even though the buyer paid in good faith and has no relationship with that financier. The buyer’s recourse is against the seller, which is worth precisely as much as the seller’s ability to pay.
The search that would have surfaced this costs a few dollars and takes minutes. It is the single highest-value check in a used equipment purchase, and it is skipped often enough that it accounts for a recognisable share of the disputes that arise.
Selling
Where the obligation follows the seller.
A business selling an asset that still carries a facility has an obligation to settle that facility, and the ordinary mechanism is settlement out of the sale proceeds with the financier discharging the registration on receipt.
Handled properly this is routine. The financier provides a settlement figure, the buyer’s funds clear it, the balance goes to the seller, and the discharge follows. Handled informally, with the machine handed over first and the facility settled afterwards, the buyer is exposed for as long as the gap lasts.
A buyer asking for written confirmation of the settlement figure and the discharge is not being difficult. It is the same sequence a dealer would follow, and a seller who resists it is worth asking about.
The one that catches people
An all present and after-acquired property interest covers assets nobody thought about.
A general security agreement can register over all present and after-acquired property of a business rather than over a named item. Where that exists, a machine bought by the business afterwards can fall inside an interest registered years earlier, without a separate registration naming it. A search against the selling entity, rather than only against the serial number, is what surfaces this, and it is the reason both searches are worth running rather than one.
Worked example
A $60,000 excavator with an undischarged interest.
A contractor buys a used excavator privately for $60,000, financed through a secured asset loan of the same amount. The machine is inspected, the price is reasonable, and no search is run because the seller is a known operator in the same region.
Fourteen months later the seller’s business fails. Their financier, which had registered against the excavator’s serial number four years earlier and was never settled, locates the machine and asserts its interest. The buyer has been making payments on their own facility throughout and now faces a claim against the asset those payments were buying.
The commercial outcome depends on facts a general guide cannot supply, and the position is one for a solicitor. What is clear is that the buyer is in a dispute they would not be in, over an amount many times larger than the search fee, because a five-minute step was skipped in a transaction that felt informal.
Illustrative figures
- Purchase price
- $60,000
- Facility taken by the buyer
- $60,000
- Payments made before the claim
- ~$21,000
- Cost of the search not run
- A few dollars
Illustrative scenario on stated assumptions. Not a description of an actual transaction and not legal advice.
Common failure modes
Four ways this goes wrong, none of them exotic.
02
A search against the wrong key
Searching the serial number of a machine that is not serial-numbered goods, or searching an individual’s name where the asset was granted by a company, can return nothing while an interest exists. Both keys are worth running.
03
A discharge assumed rather than confirmed
A seller who settled their facility last month may be entirely honest and the registration may still be sitting there undischarged. Confirmation is a fresh search, not an assurance.
04
A general security agreement overlooked
Where a business granted an interest over all present and after-acquired property, a later-purchased machine can sit inside it without appearing under its own registration.
When it goes wrong
What actually happens on a default.
The register matters most in the situations nobody plans for. These are described in general terms and the specific consequences depend on the agreement and the facts.
The borrower defaults on the facility
Where payments stop and the arrangement is not remedied, a financier holding a registered security interest has a route to the asset that an unsecured lender does not. The steps available and the notice required are set out in the agreement and in the legislation.
What happens:The asset is at risk, which is the trade-off that made the facility cheaper in the first place.
A second financier registers over the same asset
It is possible for more than one interest to exist against a single item. Where that happens, priority determines who ranks first, and the timing and manner of registration are central to that question.
What happens:A later financier may find its position is behind an earlier one, which affects what it can recover.
The asset is sold with the interest still registered
The interest does not automatically vanish because money changed hands. A buyer can find themselves holding an asset that answers for a debt they did not incur, with recourse only against the seller.
What happens:The dispute is between the buyer and the seller, and the financier’s position is often unaffected by it.
Every one of these is a legal question with facts that matter. This guide describes the shape of the mechanism so the risk is visible early. A solicitor is the right adviser once a specific transaction is in front of anyone.
The point of it
The register is not paperwork attached to a purchase. It is the reason the purchase could be financed at that price at all, and it is the one public record that will still be there when everything else about the deal is a memory.
Priority
Why the order of registration decides more than it looks like it should.
Where a single asset carries more than one security interest, the question is not whether each financier has a claim but which claim ranks ahead of the other. That ordering is what the legislation calls priority, and registration is central to establishing it. A financier that registers promptly is protecting a position it would otherwise share.
This is largely invisible to a borrower until something goes wrong, and then it determines a great deal. It also explains behaviour that can look excessive from the outside. A financier insisting on registering before funds are advanced, or declining to settle until an earlier interest is discharged, is managing the priority question rather than being obstructive.
A specific category of interest, the purchase money security interest, exists to allow a financier funding the acquisition of a particular asset to take priority over an earlier general interest in respect of that asset. The requirements are technical and the detail belongs with a solicitor. What matters for a business is knowing that the mechanism exists, because it explains why a financier funding a new machine can proceed even where a general security agreement already sits over the company.
In practice
What a well-run used purchase looks like.
The sequence that avoids nearly all of this is short. A search against the serial number and a search against the selling entity are run before any deposit is paid. Where either returns a registration, a written settlement figure is obtained from the financier named on it. Funds go to that financier first, the balance goes to the seller, and a fresh search after settlement confirms the discharge was filed rather than promised.
A dealer sale ordinarily handles this internally and the paperwork reflects it, which is part of what the dealer margin covers. A private sale puts the sequence in the buyer’s hands, and the saving on price is genuine precisely because the work has moved.
None of it is expensive and none of it is slow. The searches cost a few dollars each, the settlement figure is a phone call, and the confirming search is the same search run twice. Against a purchase in the tens of thousands of dollars it is difficult to describe as anything other than proportionate.
The finance side
What the facility behind the asset costs.
The register governs the security. The facility itself is a separate question, and this is the indicative cost of one. Indicative only, and not a quote or offer of credit.
Indicative repayment
Weekly
$358/week
$1,551 /month $14,435 total interest
$60,000
$5,000 $500,000
4 years
6 months 5 years
11.00% p.a.
8% (secured) 30% (unsecured)
Indicative only. Not a quote or offer of credit. Actual rates, fees, and repayments depend on the business profile and the lender's decision.
Sending to Prospa
Your $60,000 scenario
4 years at 11.00% . Prospa will ask a few quick questions, then provide a firm quote and funding if eligible.
Redirecting…
Method
How this guide was written, and its limits.
This describes the register and the Personal Property Securities Act 1999 in general terms. It does not reproduce the statutory tests for attachment, perfection or priority, because those are technical, they are stated precisely in the legislation, and paraphrasing them on a website risks stating a requirement inaccurately in exactly the context where accuracy carries the most weight. The legislation and the register are both linked below.
Nothing here is legal advice. This site is not a law firm and cannot see the facts of any particular transaction. Where a real purchase, sale or dispute is in question, a solicitor with the documents in front of them is the right person to answer it.
References
Sources
- Personal Property Securities Register
The register itself, including the search and registration functions described throughout this guide.
- Personal Property Securities Act 1999
The governing legislation for security interests, registration and priority.
- Companies Office
The register used to confirm that the entity granting or selling an asset is the entity it claims to be.
- New Zealand Law Society
Referenced for the point that a specific transaction or dispute is a matter for a solicitor.
- Ministry of Business, Innovation and Employment
Context for the wider regulatory framework the register sits within.
FAQ
Questions, answered
What is the PPSR?
The Personal Property Securities Register is a public New Zealand register of security interests in personal property, established under the Personal Property Securities Act 1999. It records that a financier has claimed an interest in an item, and it is searchable by anyone.
Does a clear search prove the seller owns the asset?
No. The register records security interests rather than title. A clear search is strong evidence that no financier is relying on the asset as security, which is valuable, but it does not confirm ownership and it does not verify that the item exists or is where the seller says it is.
Does a security interest survive a sale?
It can. The interest attaches to the asset rather than to the person, so selling the machine does not by itself remove it. That is precisely why a search before settlement matters, and why funds ordinarily clear the financier before they reach the seller.
What should be searched, the serial number or the seller?
Both, where the asset is serial-numbered goods. A serial number search finds interests registered against that item. A search against the selling entity finds general interests over all present and after-acquired property, which can cover a machine without naming it.
How much does a search cost?
A few dollars. The fee is published by the register and it is trivial against the value of the assets it protects, which is what makes skipping it hard to justify on any transaction of commercial size.
What is a financing change statement?
The filing a financier makes to amend or remove a registration, including the discharge filed when a facility has been settled. A settled facility with no change statement filed still shows on the register, which is why a confirming search after settlement is worth running.
What is an all present and after-acquired property interest?
A registration covering the general body of a business’s personal property rather than one named item. An asset bought later can fall inside it without a separate registration naming that asset, which is the case a serial-number search alone will miss.
What is a purchase money security interest?
A category of interest that allows a financier funding the acquisition of a specific asset to take priority over an earlier general interest in respect of that asset. The requirements are technical and belong with a solicitor, but the existence of the mechanism explains why new equipment can be financed over an existing general security agreement.
Does registration stop the borrower using the asset?
In any practical sense, no. The business uses the machine normally throughout the facility. What registration does is make the obligation visible to anyone who searches, so a later buyer or financier deals with it knowingly rather than by accident.
What happens if an interest is registered against something already bought?
That is a legal question turning on the facts, including when the interest was registered, what it covers and how the purchase was structured. It is the situation a solicitor is for, and it is considerably cheaper to avoid than to resolve.
Do dealers handle this?
Ordinarily a dealer sale deals with existing interests internally and the paperwork reflects it, which is part of what the dealer margin covers. A private sale moves that work to the buyer, which is one of the reasons the price is lower.
Is this guide legal advice?
No. It describes a mechanism in general terms. This site is not a law firm and cannot see the facts of any particular transaction, and the legislation linked in the sources is the authoritative statement of how security interests operate.
Related
Keep reading
Chattel mortgage
The structure built directly on a registered security interest.
Read onSecured asset loan
Where the registration is what makes the pricing possible.
Read onWhat asset lenders assess
How the security position feeds into a credit decision.
Read onReleasing equity from owned assets
A case where a clear register position is the starting condition.
Read onAll eight structures
Every arrangement compared in the same shape.
Read on