What is a purchase money security interest (PMSI)?
Updated 2026-10-29
The customer's bank registered an all-assets charge years ago. You delivered the goods last week. Without a PMSI, the bank's charge covers your goods the moment they arrive. With one, registered in time, your claim on those goods comes first.
Who holds a PMSI
- A supplier who sells goods on retention-of-title terms, to the extent of the purchase price of those goods
- A lessor under a PPS lease, over the leased goods
- A consignor under a commercial consignment
- A lender whose money was used to buy specific goods
The priority rule
The general PPSA rule is that the first security interest registered wins. Section 62 makes the PMSI the main exception: a PMSI that is registered within the time limits, and flagged as a PMSI on the register, takes priority over an earlier-registered security interest in the same collateral, including a bank's all-present-and-after-acquired-property registration.
The super-priority only covers the goods the PMSI relates to, and only the purchase price of them. An 'all moneys' retention-of-title clause is still a security interest for the rest of the debt, but that part ranks by registration date.
The time limits
| Collateral | Register by |
|---|---|
| Inventory (goods the customer resells or uses up) | Before the customer takes possession |
| Other goods (equipment the customer keeps and uses) | Within 15 business days after the customer takes possession |
| Goods under a PPS lease | Within 15 business days after the hirer takes possession |
| Intangibles such as accounts | Within 15 business days after the interest attaches |
On the register
The registration must have the purchase money security interest box ticked. A registration without the flag does not get the priority even if it was lodged in time. For inventory, the inventory box is ticked too. The goods are described by reference to the terms they were supplied under.
What happens if you miss the window
Your registration is still valid and still perfects the interest, so it survives insolvency. It just ranks behind anyone who registered before you over the same goods, which almost always means the bank. In practice that means the bank's receiver sells your goods and you wait with the unsecured creditors.
Common questions
Can I get PMSI priority on goods I delivered months ago?
No. The window runs from possession. A late registration still protects you against later-registered interests and against insolvency vesting, but it ranks behind the bank's earlier charge.
Does a PMSI cover the whole debt?
Only the purchase price of the goods it relates to. Interest, delivery, other invoices and any all-moneys balance are secured but rank by registration date.
What if two suppliers both claim a PMSI over the same goods?
The one who supplied the goods (the seller or lessor) ranks ahead of a lender who financed the purchase, and between sellers the register decides.