Secured Loan Agreement under PPSA (Australia)
A Secured Loan Agreement is the document Australian lenders use to take a personal-property security interest over the borrower's assets — motor vehicles, equipment, inventory, accounts receivable, or financial property — under the <em>Personal Property Securities Act 2009</em> (Cth). The security interest is perfected by registration on the Personal Property Securities Register (PPSR), giving the lender priority over later-registered interests, and (where correctly registered as a <strong>Purchase Money Security Interest</strong>) <strong>super-priority</strong> over earlier-registered interests. Our free template handles every common collateral class plus the National Credit Code / AFCA / ACL UCT compliance overlay required for consumer loans.
ACN 128 749 562
AFCA Member: 12345
ACN 634 891 257
Type: company
The Lender agrees to lend, and the Borrower agrees to borrow, the sum of AUD 500,000.00 (the "Principal") on the following terms:
1.1 Interest: Interest shall accrue on the daily outstanding balance of the Principal at 8.75 per annum (fixed), calculated daily on a 365-day year basis.
1.2 Term: The Loan has a term of 36 months commencing on the date of this Agreement.
1.3 Repayments: The Borrower shall make monthly repayments of principal and interest, with the first repayment due on 15 June 2026. All payments shall be made in cleared funds to the Lender's nominated bank account, free of any set-off or counter-claim.
1.4 Default Interest: Any overdue amount shall attract additional default interest at 5% per annum above the contractual rate, calculated daily, from the due date until paid.
The Borrower hereby GRANTS a security interest in favour of the Lender in the collateral described below as security for the punctual payment and performance of all obligations of the Borrower under this Agreement.
2.1 Collateral description:
Collateral class (PPSR): AB — Other Goods
Description: All present and after-acquired computer equipment, servers, networking infrastructure, office furniture, and software licences owned by the Borrower and used in the conduct of its software-development business — specifically including the 12 Dell PowerEdge servers (serial numbers DPE-2024-001 through DPE-2024-012) acquired with the Loan proceeds.
Value (approximate): AUD 450,000.00
2.2 PPSR registration: The Lender shall register a Financing Statement on the PPSR in respect of the security interest created by this Agreement. The Borrower acknowledges:
(a) the Lender's right to register the Financing Statement with the Registrar of Personal Property Securities;
(b) the Borrower's right under Personal Property Securities Act 2009 (Cth) section 157 to receive a Verification Statement (or a published verification under s. 158) — except where the collateral is "commercial property" and the Borrower has waived this right in writing under s. 157(3);
(c) that registration perfects the security interest (s. 21) and is required for the Lender to retain priority over subsequent secured parties and an administrator/liquidator in any insolvency event;
(d) the Borrower undertakes not to (i) sell, lease, transfer, charge, or otherwise dispose of the collateral without the Lender's prior written consent; (ii) remove the collateral from Australia; (iii) allow any other security interest to attach to the collateral with priority over the Lender; or (iv) do anything that would diminish the value of the collateral or impair the Lender's security.
3.1 Events of Default: An "Event of Default" includes: (a) any failure by the Borrower to pay any amount when due; (b) any breach of the security or covenants in this Agreement; (c) any insolvency event affecting the Borrower (winding-up under Corporations Act Chapter 5 / bankruptcy under Bankruptcy Act 1966); (d) any cross-default under any other agreement between the parties or with any other financier; (e) any material adverse change in the Borrower's financial position; (f) any disposal, encumbrance, or removal of the collateral in breach of clause 2.2(d).
3.2 Acceleration: Upon an Event of Default, the Lender may by written notice declare the entire outstanding balance of the Loan (including accrued interest, default interest, fees, costs, and indemnities) immediately due and payable.
3.3 Enforcement against collateral: The Lender may enforce its security interest in accordance with PPSA Chapter 4 (Enforcement of security interests), including: (a) taking possession of the collateral (s. 123); (b) selling the collateral by private sale, public auction, or other commercially reasonable method (s. 128); (c) appointing a receiver under any other security instrument; and (d) applying the proceeds in accordance with PPSA s. 140 (application of proceeds — costs, principal, interest, then to surplus).
3.4 Statutory disposal obligations: The Lender shall: (a) give the Borrower written notice of disposal under PPSA s. 130 (where required); (b) obtain a price not less than market value reasonably obtainable (s. 131); and (c) account to the Borrower for any surplus.
This Agreement shall be governed by and construed in accordance with the laws of the State of New South Wales, Australia and the laws of the Commonwealth of Australia. The parties submit to the exclusive jurisdiction of the courts of New South Wales.
The Personal Property Securities Act 2009 (Cth) and the Personal Property Securities Regulations 2010 (Cth) apply to the security interest created by this Agreement and prevail over any inconsistent provision of this Agreement.
Purchase Money Security Interest (PMSI): The security interest created by this Agreement is a PMSI within the meaning of Personal Property Securities Act 2009 (Cth) s. 14. The Lender shall register the Financing Statement with the PMSI flag set to "yes", and shall complete registration before the Borrower obtains possession of the new equipment from the supplier (estimated 20 May 2026). A correctly registered PMSI takes super-priority over any other security interest in the same collateral, regardless of the order of registration on the PPSR — see PPSA ss. 62-63. If the PMSI registration timing window is missed, the security interest falls back to ordinary "first-to-perfect" priority.
Australian Financial Complaints Authority (AFCA): The Lender is a member of AFCA (member number 12345). The Borrower has the right to lodge a complaint with AFCA at any time concerning this Agreement, including in connection with any hardship application, default notice, enforcement action, or other dispute. AFCA contact: 1800 931 678 or www.afca.org.au.
ACL / ASIC Act Unfair Contract Terms (9 November 2023): Each Lender that is the lender under a standard-form small-business or consumer contract is subject to the Unfair Contract Terms regime under the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010) ss. 23-28 and the ASIC Act 2001. As of 9 November 2023, penalties for unfair terms apply: up to AUD 50 million for corporate lenders, or 3 × benefit derived, or 30% of adjusted turnover during the breach period. The Lender confirms that the terms of this Agreement have been reviewed against the UCT regime and are reasonably necessary to protect the Lender's legitimate interests, are transparent, and do not cause significant imbalance in the parties' rights.
Additional Default Triggers: In addition to the standard Events of Default in clause 3.1, the following events constitute additional Events of Default under this Agreement: Any change of control of the Borrower; any material adverse change in the Borrower's software-development business; any breach of the Borrower's key customer contracts representing >30% of revenue.
Personal Guarantee: The obligations of the Borrower under this Agreement are guaranteed by Sarah J. Mitchell under a separate Deed of Guarantee and Indemnity executed concurrently with this Agreement. The Guarantor's obligations are joint and several with the Borrower and are not discharged by any variation of this Agreement, the granting of time or indulgence to the Borrower, or any other matter that would discharge a strict surety.
What Is a Secured Loan Agreement under PPSA?
A <strong>Secured Loan Agreement</strong> is a contract under which a lender advances money to a borrower in exchange for the grant of a <strong>security interest</strong> in personal property (anything other than land — vehicles, equipment, inventory, accounts receivable, financial assets). The security interest is governed by the <em>Personal Property Securities Act 2009</em> (Cth) (the <strong>PPSA</strong>), which commenced on 30 January 2012 and replaced over 70 separate State and Commonwealth security regimes. The PPSA is administered by the Registrar of Personal Property Securities, who maintains the national <strong>Personal Property Securities Register (PPSR)</strong> at www.ppsr.gov.au.
Australian lenders register a <strong>Financing Statement</strong> on the PPSR to <em>perfect</em> the security interest (PPSA s. 21). Perfection gives the lender priority over (a) later-registered security interests in the same collateral, and (b) an administrator, liquidator, or trustee in bankruptcy of the borrower in any insolvency event. Without perfection, the security interest may be <strong>extinguished</strong> in the borrower's insolvency under PPSA s. 267 — even though the loan agreement remains contractually valid. Registration also requires the lender to provide the borrower with a <strong>Verification Statement</strong> under PPSA <strong>section 157</strong> (or rely on the published verification under s. 158), unless the borrower has waived the right in writing for commercial property under s. 157(3).
The most powerful priority position is the <strong>Purchase Money Security Interest (PMSI)</strong> under PPSA <strong>s. 14</strong>. A PMSI is a security interest in collateral acquired with the lender's funds (or otherwise enabling the borrower to acquire rights in the collateral). Correctly registered, a PMSI takes <strong>super-priority</strong> over <em>all</em> other security interests in the same collateral — even those registered earlier on the PPSR (ss. 62-63). The timing is strict: for <strong>inventory</strong> the registration must be complete <em>before</em> the borrower obtains possession; for <strong>other goods</strong>, within <strong>15 business days</strong> after the borrower takes possession. Missing the window forfeits super-priority and the security falls back to ordinary "first-to-perfect" line. Where the borrower is an individual consumer, the loan is additionally regulated by the <em>National Consumer Credit Protection Act 2009</em> (Cth) and the National Credit Code — requiring an Australian Credit Licence, AFCA membership, responsible lending compliance, and the s. 72 hardship variation right.
What's Covered in This Template
Our Australian Secured Loan Agreement covers every element required for a PPSA-registered loan plus the consumer-credit overlay where applicable.
Lender and Borrower Details
Names, ACNs, addresses, plus optional AFCA member number for the Lender and borrower-type selector (company / sole trader / partnership / trust).
Principal, Rate, and Term
Loan principal in AUD, interest rate (fixed / BBSW + margin / other variable), loan term in months, default interest surcharge.
Repayment Schedule
Monthly / quarterly / annual instalments OR bullet repayment at maturity. First-repayment date drives the schedule.
PPSA Collateral Class
5 standard collateral classes: Motor Vehicle (AC), Other Goods (AB), Inventory (AB1), Financial Property (AE), Account (AD) — drives the PPSR registration form and timing rules.
PPSR Registration Acknowledgement
s. 157 Verification Statement right + s. 21 perfection rules + s. 153 multi-collateral registration + s. 267 extinguishment risk.
Events of Default
Non-payment, breach, insolvency, cross-default, material adverse change, collateral disposal — comprehensive default trigger list.
Enforcement under Chapter 4 PPSA
s. 123 possession + s. 128 sale + s. 130 notice + s. 131 commercially reasonable price + s. 140 application of proceeds + receivership.
Governing Law + NCC Overlay
State law governance + NCC for consumer loans (NCCP Act + NCC Schedule 1).
Expert: PMSI Super-Priority
s. 14 PMSI registration with timing-rule reminder (before-possession for inventory; 15 business days for other goods). Super-priority under ss. 62-63.
Expert: NCC s. 72 Hardship + AFCA
21-day hardship application processing, AFCA membership for external dispute resolution, responsible lending compliance under NCCP Act Chapter 3.
Expert: ACL UCT (9 Nov 2023)
AUD 50M penalty regime for unfair terms in standard-form contracts. Acknowledge compliance review.
Expert: Personal Guarantee
Cross-reference to separate Deed of Guarantee and Indemnity where personal guarantee is required.
How to Create a Secured Loan Agreement
Follow these steps to produce a PPSA-compliant loan agreement ready for execution and PPSR registration.
- 1
Identify Lender, Borrower, and Loan Terms
Enter the Lender (with ACN and AFCA member number if a credit licensee), the Borrower (with ACN and type — company / sole trader / partnership / trust), and the principal, interest rate, term, repayment frequency, and default rate.
- 2
Decide if NCC Applies
If the Borrower is an individual and the loan is for personal, domestic, household, or residential investment purposes, the NCC applies and the Lender must hold an Australian Credit Licence. If the Borrower is a company or the loan is for genuine business purposes, the NCC does not apply.
- 3
Describe the Collateral
Choose the PPSA collateral class (AC Motor Vehicle, AB Other Goods, AB1 Inventory, AE Financial Property, AD Account). Provide a sufficiently particularised description — specific serial numbers, models, locations. Insufficient particularity can make the security unenforceable.
- 4
Add PMSI and Additional Collateral if Relevant
If the loan is funding the acquisition of the collateral, mark the PMSI flag and ensure registration is completed within the timing window (before-possession for inventory; 15 business days for other goods). If additional collateral classes apply, register separate Financing Statements for each.
- 5
Execute and Register on PPSR
Sign as a contract (or as a deed for stronger limitation period). The Lender registers the Financing Statement on the PPSR via www.ppsr.gov.au and provides the Borrower with the Verification Statement within a reasonable time after registration (s. 157). Renewal is required every 7 years for non-consumer property and every 25 years for consumer property.
Legal Considerations
PPSA loans involve strict timing rules and dual compliance with credit-licensing law — get either wrong and the security can be extinguished or penalties imposed.
This template is for informational purposes only and does not constitute legal or financial advice. PPSA registration timing rules are strict — particularly for PMSI super-priority (before-possession for inventory; 15 business days for other goods). For consumer loans, the lender must hold an Australian Credit Licence under the National Consumer Credit Protection Act 2009 and comply with responsible lending obligations. Always obtain advice from an Australian commercial / finance lawyer before lending under PPSA.
Reviewed for Australian credit and security law
PPSA Perfection and Priority
Perfection of a security interest under <em>Personal Property Securities Act 2009</em> (Cth) is achieved primarily by <strong>registration</strong> on the PPSR (s. 21), and secondarily by <strong>possession</strong> (s. 24) or <strong>control</strong> (s. 26, for financial property). Unperfected security interests are <strong>extinguished</strong> in the borrower's insolvency under s. 267 — the secured party becomes an unsecured creditor for the loan amount. The priority of perfected security interests is determined by registration order (s. 55, first-to-perfect rule), with <strong>PMSI super-priority</strong> as the major exception (ss. 62-63). The PPSR contains over 12 million active registrations as at 2026, and the lender bears full responsibility for the accuracy and timeliness of each registration.
PMSI Super-Priority — Strict Timing
<strong>Purchase Money Security Interest (PMSI)</strong> under PPSA <strong>s. 14</strong> takes super-priority over all other security interests in the same collateral when registered correctly (PPSA ss. 62-63). The timing rules are <strong>strict</strong>: (a) for <strong>inventory</strong> (collateral for sale or lease), registration must be completed <em>before</em> the borrower obtains possession of the collateral; (b) for <strong>other goods</strong> (equipment, motor vehicles, etc.), registration must be completed within <strong>15 business days</strong> after the borrower takes possession; (c) for <strong>intangibles</strong> (financial property, accounts), within 15 business days after the security attaches. Missing the window <em>permanently</em> forfeits the super-priority — the security falls back to ordinary first-to-perfect line, behind any earlier-registered security in the same collateral.
National Credit Code — When It Applies
The <em>National Consumer Credit Protection Act 2009</em> (Cth) and the National Credit Code (Schedule 1) apply where: (a) the borrower is an <strong>individual</strong> or strata corporation; (b) the credit is for personal, domestic, household, or residential investment purposes; and (c) a charge is made for providing the credit. Compliance requires: (a) an <strong>Australian Credit Licence</strong> issued by ASIC; (b) <strong>AFCA membership</strong> for external dispute resolution; (c) <strong>responsible lending obligations</strong> under NCCP Act Chapter 3 — reasonable inquiries, verification, "not unsuitable" assessment; (d) <strong>NCC s. 72 hardship variation</strong> right; (e) cooling-off period under NCC s. 17. Penalties for non-compliance are significant — up to AUD 13.32 million for corporations under NCCP Act s. 167 (FY2025-26 indexed). Business loans to companies are <strong>not</strong> covered by the NCC.
ACL Unfair Contract Terms — 9 November 2023
Since <strong>9 November 2023</strong>, the <em>Australian Consumer Law</em> (Schedule 2 to the <em>Competition and Consumer Act 2010</em>) and <em>ASIC Act 2001</em> impose penalties of up to <strong>AUD 50 million</strong> (or 3 × benefit derived, or 30% of adjusted turnover during the breach period) for including unfair terms in standard-form small-business or consumer contracts. The small-business threshold is <strong>fewer than 100 employees</strong> OR annual turnover under <strong>AUD 10 million</strong>. Common loan-agreement terms scrutinised under the regime: default-interest clauses that are punitive (rather than reflecting reasonable compensation for delay); cross-default triggers; unilateral variation rights; broad acceleration clauses; restrictions on the borrower's rights to dispute charges. Best practice: review every term against the UCT regime, make defaults reasonable, justify any term that limits the borrower's rights.
Frequently Asked Questions
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Enter the lender, borrower, loan terms, and collateral details. Choose the PPSA collateral class. Add the Expert PMSI super-priority + NCC consumer-credit + ACL UCT + personal-guarantee protections you need. Produce a Loan Agreement ready for execution and PPSR registration.
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