Collection Consultancy Australia

Continuous Line Of Credit Loan Agreements - FAQ's

A Continuous Line Of Credit Loan Agreement is a loan agreement which is generally set up between a director or business owner as an individual and their company or trading entity.
Continuous Line of Credit Loan Agreements are designed to make business owners secured creditors over their own businesses.
Our Continuous Line of Credit Loan Agreements are designed and incorporate the appropriate legislation to ensure the business owner or director can register a valid PPSA Registration and in doing so, becoming a secured creditor.
By becoming a Secured Creditor against your own business, you are protecting any payments you receive from your business and ensuring that those payments aren’t subject to Preferential Payment Clawback.

Since the introduction of the PPSR liquidator now has the right to claw back any payments made to an unsecured creditor, in the previous 6 months from the date of liquidation in favour of a secured creditor.

This means that if your trading entity was to file for liquidation and you haven’t registered a PPSA Registration against your trading entity and become a secured creditor, you could lose the last six (6) months of payments made to you by your trading entity. This would include the repayment of any out-of-pocket expenses, including the reimbursements of company expenses paid for using a personal credit card.

Six (6) months of company expenses could certainly add up not forgetting any other payments.

The Personal Property Securities Register is simply an online notice board which is a register of security interests paced by businesses and individuals against the businesses or individuals to which they extend credit.
It is located online and is an Australian Federal Government Program and is managed specifically by the Australian Financial Security Authority.
Part of our Continuous Line of Credit Loan Agreement Package is our Loan Management Dashboard which gives you complete access to your loan agreement on an ongoing basis.
The loan period can be negotiated between the lender and the borrower but is generally set for a defined period of less than 7 years.
Yes, a Continuous Line of Credit Loan Agreement loan period can be extended or renewed at any stage.

Any Questions?

You are welcome to email us any questions – or call to speak to a consultant.