PMSI

Question 1

Generally

Answer 1

This is a type of special security interest in goods that has priority over all other security interests in the same goods if certain requirements are met.

A PMSI has priority over ALL security interests in the same goods if certain requirements are met.

Can be seller finances or financer financed.

Question 2

PSMI in Software

Answer 2

If PMSI created in computer, the PMSI extends to any software that is also covered by the creditor’s security interest.

Question 3

Definitions

Answer 3

Seller financed: a creditor SELLS the goods to the debtor on credit, retaining a security interest in the goods for all or part of the purchase price (creditor and seller are same person).

Financer financed: A creditor ADVANCES funds that are used by the debtor to purchase the goods.