PMSI (purchase money security interest)
A security interest that secures the purchase price of goods, or a lessor's interest under a PPS lease; it can rank ahead of earlier registrations.
A supplier who retains title until paid, and a hire company under a PPS lease, both hold a PMSI. If registered in time and flagged as a PMSI, it takes priority over an earlier all-assets charge held by the customer's bank over the same goods. Miss the window and the interest still exists, but ranks behind.
Related terms
- Super-priority — The PMSI's ability to rank ahead of an earlier-registered all-assets security interest over the same goods.
- Registration timing — The windows that decide whether a registration gets PMSI priority and survives s588FL.
- Retention of title (ROT) — A clause in supply terms that keeps ownership of goods with the supplier until the customer pays.
- PPS lease — A lease or bailment of goods for more than two years, or for an indefinite term, by a lessor regularly engaged in leasing.
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