What is a PPSA search and why do I need one?

This is one of the few diligence steps where skipping it has a clean, immediate failure mode. The registry exists so that anyone can discover who has a claim on movable business assets, and it is searchable before you commit a dollar.

What a registration means

A lender financing equipment, or a bank with a general security agreement, registers its interest against the debtor. The registration gives notice to the world and generally lets the secured party enforce against the collateral even after it changes hands. The asset you bought is still the lender’s collateral; the fact that you paid the seller for it does not discharge their claim.

Search the right names, not just the obvious one

Searches run against names and serial numbers, so the exact legal name of the vendor corporation matters, as do former names, operating names and the names of predecessor entities. A search against a trade name that is not the registered debtor can come back clean while registrations sit against the legal name. Serial-numbered goods — vehicles and certain equipment — are searched separately.

What to do with what you find

Registrations are normal and most businesses have some. The question is which relate to debt being repaid at closing and which will survive. The usual answer is a discharge or an estoppel-style confirmation from each secured party, delivered at or before closing, with a portion of the price directed to paying out the underlying loan rather than to the seller.

Stale registrations still need clearing

A registration for a loan repaid years ago may still sit on the registry because nobody discharged it. It is not a liability in substance and it is still a problem in form — your own lender will want the registry clean. Allow time for discharges, because they depend on a third party acting rather than on the parties to your deal.