Guarantees & securities in Victoria.

A guarantee is a promise to pay someone else's debt if they do not. Most commercial guarantees are also indemnities, which means the guarantor's liability can survive events that would otherwise discharge a guarantee, a variation to the loan, a release of another guarantor, or the borrower's insolvency. They are usually joint and several, so the creditor can pursue whichever guarantor has assets rather than an equal share from each.

A security is the creditor's claim over an asset. Over land, that is a registered mortgage or a caveat. Over personal property, equipment, inventory, receivables, shares and the whole of a company's assets, it is a security interest under the Personal Property Securities Act, perfected by registration on the PPSR. Priority between competing creditors is decided largely by registration, and an unregistered or defective security can vest in a liquidator and be lost entirely.

We act on both sides. For guarantors, the work is limiting exposure, capping the amount, confining it to a single facility, excluding future advances, negotiating a release trigger and getting independent advice on the record. For lenders, landlords and suppliers, it is making sure the guarantee is enforceable and the security is registered correctly and on time.

Registration timing matters. A PPSR registration made outside the statutory window before insolvency can be void against a liquidator, the security you paid for simply disappears when you need it most.