Also known as: purchase money security interest · purchase-money security interests · PMSI
Written by attorneys · grounded in primary & secondary sources — see below
A security interest taken or retained by a seller of collateral to secure all or part of its price or taken by a person who gives value to enable the debtor to acquire rights in or the use of collateral if that value is in fact so used.
Patricia Patel buys manufacturing equipment from Prism Analytics on credit and grants Prism a purchase-money security interest. Prism files a financing statement eighteen days after Patricia receives the equipment. A judgment creditor obtains a lien on the equipment twelve days after delivery. Prism's interest takes priority over the judgment creditor's lien.
Pablo Perez buys a washing machine for household use from Precision Tools on a store credit card that creates a purchase-money security interest. Precision Tools does not file a financing statement. When Pablo later files for bankruptcy, Precision Tools' interest remains perfected without filing.
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Phuong Pham borrows from Patriot Insurance to buy specialized laboratory equipment and grants Patriot a purchase-money security interest. Patriot perfects by filing the day after Phuong receives the equipment. An earlier lender holds a perfected security interest in all of Phuong's equipment. Patriot's interest has priority in the new equipment.
Pierre Poulin obtains inventory financing from Phoenix Technologies for new stock and grants Phoenix a purchase-money security interest. Phoenix perfects when Pierre receives the goods and sends timely notice to an existing inventory lender. Phoenix's interest has priority in the inventory and its identifiable cash proceeds received on or before sale.
No. A purchase-money security interest in consumer goods is automatically perfected when it attaches under UCC § 9-309(1), unless the goods are subject to a certificate-of-title statute.
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If the secured party files a financing statement before or within twenty days after the debtor receives delivery of the collateral, the purchase-money security interest takes priority over a lien creditor that arises in the gap period under UCC § 9-317(e).
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A perfected purchase-money security interest in goods other than inventory or livestock has priority if it is perfected when the debtor receives possession or within twenty days thereafter under UCC § 9-324(a).
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The secured party must perfect when the debtor receives possession, send signed notification to conflicting inventory secured parties, and meet the content requirements of the notice under UCC § 9-324(b).
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Yes. Under Article 9 a consignor's interest in goods delivered to a merchant on consignment is treated as a purchase-money security interest in inventory.
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…petitioners agreed to make 68 biweekly payments to cover this debt; Instant Auto — and subsequently respondent — retained a purchase money security interest that gave it the right to repossess the truck if petitioners defaulted under the contract. On October 25, 1999, petitioners, by then in default on their payments to respondent, filed a…