What does an all-monies clause add to retention of title?

It keeps title with the supplier until everything the buyer owes that supplier has been paid, not only the price of the goods in question, so the supplier need not match each item to an unpaid invoice. In the UK it is generally not a charge and needs no registration. In New Zealand and Australia it is a security interest, and its purchase money priority reaches only the price of the goods. Anything more it secures ranks in the ordinary way.

Does a retention of title clause need to be registered?

In New Zealand and Australia, in practice yes, if the supplier wants it to hold against a secured lender. Registering in time gives it purchase money priority. In the UK, a simple or all-monies clause is generally not a charge and needs no registration. A UK clause that reaches proceeds or finished products is likely to be a charge, which must be delivered to Companies House in time or be void against a liquidator or administrator.

What happens to retention of title when goods are sold on?

A customer who buys in the ordinary course of the buyer's business usually gets good title, and the supplier cannot take the goods back from that customer. The supplier's claim may then move to the proceeds. In New Zealand and Australia, a registered interest can extend to proceeds as the Acts provide. In the UK, a proceeds claim usually needs either a true fiduciary arrangement or a registered charge, and most clauses have neither.

Can a supplier collect its goods from an insolvent customer?

Sometimes, but it is rarely simple. The supplier must show that its clause is part of the contract, that its interest holds against other creditors and that the goods in question are its own and unpaid for. Goods without serial numbers and goods already used are the usual difficulties. A receiver or liquidator will usually ask for the proof first. In a UK administration the supplier needs the administrator's consent or the court's permission to repossess.

// WORKED EXAMPLEWHERE THE RISK SITS

Retention of Title: What It Does to a Lender's Stock

Some of the stock in the warehouse is still the supplier's.

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-09 · 6 MIN READ

// THE SHORT ANSWER

When a lender counts a borrower's stock, retention of title is the reason part of it may not count. Suppliers who sell on these terms stay owners until they are paid, so goods on the warehouse floor can be collected, or their sale proceeds claimed, before the lender sees anything. How strong that claim is depends on the market. In New Zealand and Australia the clause creates a security interest and turns largely on registration; in the UK a simple clause needs no registration but depends on the supplier identifying its goods. A desk lending on stock allows for both.

BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// MAKE THE CALL

Issue 03 — Kauri Dairy Holdings. The patriarch is retiring. The bank hears about the succession plan from the accountant first. Your call first, then the senior banker's.

Read the file →

PART OF What Your Bank Holds as Security

// 01 — WHY A SUPPLIER'S CLAUSE WORRIES A LENDER

A general security agreement covers what the company owns. Trade suppliers often deliver on credit and write into their terms that they stay owner until paid, so the goods a bank has counted may be sitting in the warehouse on someone else's title. The trade creditors' ledger shows who is unpaid, and the supplier terms say on what basis. Those two documents are what the lender needs, and neither appears on the balance sheet line for inventory.

The clause also moves against the lender at the worst time. When a business weakens, suppliers tighten terms and unpaid balances grow, so the share of stock subject to these claims is highest just when the lender may need to rely on it. A receiver or liquidator faces the same list of supplier claims in the first week of an appointment.

// 02 — FOUR CLAUSES AND TWO LEGAL SYSTEMS

Simple title stays until these goods are paid for

All-monies title stays until everything owed is paid

Proceeds supplier claims the money from a resale

Mixed goods supplier claims the product made from its goods

New Zealand and Australia look at substance. Under their personal property securities Acts a sale on retention of title is a security interest, so the supplier must register to hold against other secured parties. Registered in time, usually as a purchase money interest, it can outrank an earlier general security: for inventory, the registration has to be in place when the buyer takes possession, and in Australia it must also say it is a purchase money interest. Unregistered, the supplier ranks behind the bank in New Zealand, and in Australia loses the interest if the buyer enters liquidation or administration. An all-monies clause gets the special priority only so far as it secures the price of the goods. Both Acts can carry a perfected interest into a manufactured product, up to the value of the goods that went in.

The UK looks at title. A simple or all-monies clause leaves ownership with the seller and is generally not a charge, so it needs no registration. A clause reaching resale proceeds or finished products, by contrast, is likely to be treated as a charge, and a charge not delivered to Companies House is void against a liquidator or administrator. The supplier must also prove which goods are its own.

// 03 — THE EXAMPLE

A maker of hot tubs, constructed for this page like every figure in it, holds US$3.2m of stock at cost, and its bank holds an earlier general security. The company fails. Pumps from supplier A carry serial numbers and are unpaid; A registered before delivery. Acrylic sheet from supplier B is unpaid; B also registered before delivery, and part of its sheet has been moulded into shells. Fittings from supplier C are unpaid, and C's terms retain title but it did not register. In the UK column, read every clause as one that a court would accept and no charge as delivered to Companies House.

Cost NZ / Australia UK

A Pumps, serial-numbered 0.90 supplier supplier

B Sheet still on the racks 0.40 supplier supplier

B Sheet moulded into shells 0.30 supplier* bank

C Fittings, unregistered 0.50 bank supplier

Other stock, paid for 1.10 bank bank

Total 3.20

Stock the bank can count 1.60 1.40

Advanced at 50% of cost 0.80 0.70

Advanced on all stock at 50% 1.60 1.60

* Up to the sheet's value when it went into the shells, and subject to how the competing interests rank. The 50% advance rate is the example's and is not offered as a market norm.

The two markets disagree on two lines. C's fittings go to the bank in New Zealand and Australia because C did not register, and to C in the UK because no registration was needed. B's shells go the other way: the sheet has lost its identity, so a UK supplier can claim the finished product only through a charge it did not register. In either market the bank can count half the stock it expected, or less, before any discount for condition or age. In the UK, an administrator's moratorium also applies: goods held under a retention of title agreement cannot be repossessed without the administrator's consent or the court's permission.

// 04 — RETENTION OF TITLE AND THE CLOSEST TERMS

A purchase money security interest is the statutory category in New Zealand and Australia into which a properly registered clause usually falls. It is wider, because it also covers financiers and lessors of specific goods. A floor plan arrangement is the same idea used by a financier rather than a supplier. A general security agreement covers what the company has rights in, and the two collide on exactly these goods.

Resale deserves separate attention. A customer who buys in the ordinary course of the business usually takes the goods free of the supplier's claim, so the claim shifts to the money or the receivable. In New Zealand and Australia a registered purchase money interest can extend to those proceeds, which means a supplier may be competing for the debtors as well as the stock. A lender that registered first over receivables as original collateral, for new value, can still rank ahead on them.

DEFINED IN ONE PARAGRAPH → · THE PPSR → · THE BORROWING BASE CERTIFICATE →

// 05 — WHERE IT DECIDES A FILE

A desk lending on stock starts with the largest suppliers: what terms do they sell on, how much is unpaid, and, in New Zealand and Australia, who appears on the PPSR? Stock under valid claims is commonly treated as ineligible in a borrowing base, or the lender reserves against the unpaid balance. The review is repeated, because supplier terms change, and a stock audit can test whether goods can in fact be told apart in the warehouse.

When the loan is in trouble, the same work happens in days instead of months. A receiver lists each claim, asks for the contract, checks the registration and matches goods to invoices. Where stock cannot be identified, the supplier's claim may fail. The Bank in Your Audit File comes at the same claims from the auditor's side.

WHAT YOUR BANK HOLDS AS SECURITY → · INVENTORY DAYS →

// SOURCES

The documents the statements on this page rest on. Each was opened and checked when cited.

Federal Register of Legislation (Australia), Personal Property Securities Act 2009, sections 12(2)(d), 14, 62 and 99 (compilation as at 14 October 2024) — Treats a sale subject to retention of title as a security interest, confines purchase money status to the extent the interest secures the price, sets the inventory timing and requires the registration to state that status, and continues a security interest in a product — section 02.
UK Insolvency Act 1986, Schedule B1, paragraphs 43(3) and 111(1) — Prevents repossession of goods under a hire-purchase agreement, defined to include a retention of title agreement, without the administrator's consent or the court's permission — section 03.

// QUESTIONS PEOPLE ASK

What does an all-monies clause add to retention of title?: It keeps title with the supplier until everything the buyer owes that supplier has been paid, not only the price of the goods in question, so the supplier need not match each item to an unpaid invoice. In the UK it is generally not a charge and needs no registration. In New Zealand and Australia it is a security interest, and its purchase money priority reaches only the price of the goods. Anything more it secures ranks in the ordinary way.
Does a retention of title clause need to be registered?: In New Zealand and Australia, in practice yes, if the supplier wants it to hold against a secured lender. Registering in time gives it purchase money priority. In the UK, a simple or all-monies clause is generally not a charge and needs no registration. A UK clause that reaches proceeds or finished products is likely to be a charge, which must be delivered to Companies House in time or be void against a liquidator or administrator.
What happens to retention of title when goods are sold on?: A customer who buys in the ordinary course of the buyer's business usually gets good title, and the supplier cannot take the goods back from that customer. The supplier's claim may then move to the proceeds. In New Zealand and Australia, a registered interest can extend to proceeds as the Acts provide. In the UK, a proceeds claim usually needs either a true fiduciary arrangement or a registered charge, and most clauses have neither.
Can a supplier collect its goods from an insolvent customer?: Sometimes, but it is rarely simple. The supplier must show that its clause is part of the contract, that its interest holds against other creditors and that the goods in question are its own and unpaid for. Goods without serial numbers and goods already used are the usual difficulties. A receiver or liquidator will usually ask for the proof first. In a UK administration the supplier needs the administrator's consent or the court's permission to repossess.

// NEXT TO IT

// ON WHOSE DESK

The seats that read this term in an ordinary week. Each page says what the seat is for, who arrives in it, and the shape of the round it runs.

Credit sanctionerHolds delegated authority and signs — or declines — the lending the front line brings.
Legal counselAdvises the bank on what it can do, drafts and negotiates what it signs, and manages what goes wrong.
Lending operations officerTurns an approval into a working facility — documentation, security, drawdown, and the register that says what the bank actually holds.

THE IN-TRAY · ONE MINUTE

Make the call on one file.

A short file on the ground this page covers. Every option opens with how far it sits from a senior banker’s read.

THE CALL · THE LOAN · PROTECTION

A borrower fails. The bank holds a floating charge over its stock and debtors. Employees are owed wages, and the tax authority is owed sales tax.

Who may be paid before the bank from those assets?

7 MORE ON THE LOAN · PROTECTION →WHERE DO YOU READ FROM? THE PLACEMENT →

THE READING ROOMIN ONE PARAGRAPHRetention of title What is a retention of title clause, and why does it matter to a lender?