A purchase money security interest (PMSI)is a special type of security interest that gives the secured party priority over existing perfected security interests.

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A PMSI grants the lender priority over other secured creditors, even those who perfected their security interests before the PMSI was perfected, provided certain conditions are met, such as proper notification to other secured parties and timely perfection of the PMSI. This is particularly common in transactions involving the sale of goods or financing of equipment, where the seller or lender wants to ensure priority for the credit extended to enable the buyer to acquire the goods.

A Purchase Money Security Interest (PMSI)is a Special Type of Security