- The PPSA governs how lenders and other creditors register and rank security interests in personal property — equipment, inventory, accounts receivable, and similar assets, as opposed to…
- If your lender is taking security over the same assets — the equipment, inventory, or receivables of the business you're buying — it needs to know it will actually have first priority.
- Ontario's government-set PPSA fees are modest, usually a small line item next to the rest of your closing costs.
Before a lender releases funds to finance your purchase of an Ontario business, it almost always runs a search against the seller's equipment, inventory, and other personal property under the Personal Property Security Act (PPSA). This single search can surface existing loans, leases, or liens registered against exactly the assets you're about to buy or lend against — and it shapes what conditions the lender attaches before your money moves.
Here's what a PPSA search actually does, why lenders insist on it, and what happens when it turns something up.
What a PPSA Search Actually Shows
The PPSA governs how lenders and other creditors register and rank security interests in personal property — equipment, inventory, accounts receivable, and similar assets, as opposed to real estate, which is registered separately in Ontario's land registry system. A search of the PPSA registry against the seller (and, in an asset deal, against the specific assets being sold) shows:
- Any existing registered security interests — for example, an equipment lender, an operating line of credit secured against inventory and receivables, or a registration from a prior purchase.
- The registered party's name, the collateral description, and the registration's status and term.
- Whether a registration has already been discharged, or is still active and needs to be dealt with before or at closing.
Why a Lender Insists on a Search Before Releasing Funds
If your lender is taking security over the same assets — the equipment, inventory, or receivables of the business you're buying — it needs to know it will actually have first priority. An existing, undischarged registration from an old supplier or a previous lender can sit ahead of your lender's new security interest even after closing, which is exactly the kind of risk a lender won't fund around without a plan to clear it.
A search also protects you as the buyer, quite apart from what your lender requires. In an asset purchase, liabilities you haven't expressly assumed generally stay with the seller — but a registered security interest can still follow the specific asset if it isn't discharged, which is one reason PPSA searches are considered a standard part of due diligence, not just a lender formality.
Ontario PPSA Fee Snapshot
Ontario's government-set PPSA fees are modest, usually a small line item next to the rest of your closing costs. Figures below are current as of mid-2026 — confirm the actual fee before relying on it, since government fee schedules do change.
| Service | Approximate Fee |
|---|---|
| Registration (1–25 year term) | $8/year |
| Registration (perpetual term) | $500 |
| Amendment to an existing registration | $12 |
| Discharge of a registration | No charge |
| Search (online or by certificate) | $8 |
What Happens If the Search Turns Up an Existing Registration
- Confirm whether it's actually still owed. Some registrations are stale — the underlying debt was paid off years ago and nobody filed a discharge. Your lawyer can request payout confirmation or a discharge directly from the registered party.
- Get a payout statement and arrange for discharge at closing. Where the debt is real, the seller (or the closing funds) typically pays it off, and the registered creditor discharges its registration as part of the closing mechanics.
- Negotiate a holdback if timing is tight. If a discharge can't be confirmed by closing day, buyers commonly hold back part of the purchase price in escrow until the registration is cleared.
- Escalate if the seller disputes it. Occasionally a registration is contested — this is a due diligence flag that needs resolution before you close, not something to close around and sort out later.
When in the Deal the Search Happens
A PPSA search is normally run early in due diligence, so any issues surface with time to address them, and again close to closing to make sure nothing new has been registered in the meantime. Lenders typically insist on this second, "bring-down" search immediately before advancing funds.
Frequently asked questions
Who pays for a PPSA search — the buyer or the lender?
This is a negotiated point that varies by deal, but in practice the cost is small enough that it's rarely a sticking point. What matters more is making sure the search happens at the right times in the transaction, not who writes the modest fee.
Does a PPSA search cover real estate too?
No. The PPSA covers personal property — equipment, inventory, receivables, and similar assets. Interests in land are registered separately in Ontario's land registry system, which is why a business purchase involving real property needs both kinds of searches.
What's the difference between a registration and a discharge?
A registration is the public notice a creditor files to claim priority in specific collateral. A discharge removes that registration once the underlying obligation is satisfied. An undischarged registration can remain visible on a search even after the debt is paid, if nobody files the discharge.
Can a seller refuse to deal with a registration a search turns up?
A seller can dispute whether a registration is valid or still owing, but an unresolved registration against the assets you're buying is a real risk to you and your lender. It generally needs to be addressed — through payout, discharge, or a holdback — before a sale can close cleanly.
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