Although ConstructCo has already entered into a general security agreement with BigBank that grants a security interest in all of its existing and after acquired personal property,Alpha Lending Inc has agreed to lend ConstructCo $15,000 to purchase a new forklift.What is the name of the type of security interest that would best serve Alpha Lending Inc in these circumstances?

Question

Quizplus · Accepted Answer

A purchase money security interest (PMSI) gives the lender (Alpha Lending Inc) a priority claim on the financed item (the forklift) over other creditors, including those with a previously established security interest in all of the borrower's assets, like BigBank.

Although ConstructCo Has Already Entered into a General Security Agreement