Purchase money security interest

A purchase money security interest (PMSI) is a special type of security interest used by a seller of merchandise to secure payment for that merchandise.

It requires filing a UCC form and notifying other creditors before the goods are delivered to the buyer or debtor. This special procedure enables the creditor (seller) to obtain priority over any other creditor (especially banks) that have previously filed blanket UCC forms.

A PMSI is only possible when new value (debt) is provided. If the purpose is to secure prior indebtedness, then a general security filing should be used.