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Purchase Money Security Interest (PMSI)

A specialized type of security interest created under the UCC that enables a lender that finances a debtor’s acquisition of goods (which can include things like equipment or machinery) or software to acquire a first priority security interest in the collateral acquired with the loan.

Even if another creditor holds an earlier perfected security interest that would cover the collateral acquired, the PMSI secured creditor takes priority in the collateral.



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