UCC PMSI Services

The purchase money security interest (PMSI) is a valuable risk management tool for those who finance a debtor’s acquisition of goods. The PMSI provides the secured party with the first priority security interest in the purchase-money collateral, even if other creditors hold earlier-perfected security interests.

As an exception to the general priority rules, the secured party must strictly comply with the statutory PMSI requirements to obtain PMSI priority. Even minor deviations from the statutory rules could leave the secured party’s claim subordinate to the claims of other creditors.

Generally, compliance with purchase money security interest perfection requirements simply requires the secured party to file a financing statement before the statutory deadline. However, some types of transactions require the secured party to take an extra step and send a notice to the holder of any conflicting security interest.