Purchase Money Security Interest (PMSI) Definition | Becker

Accounting Dictionary

Purchase Money Security Interest (PMSI)

A purchase money security interest is a special type of security interest that arises when a creditor sells the collateral to the debtor on credit, retaining a security interest in the collateral or when the creditor advances funds used by the debtor to purchase the collateral. A properly perfected purchase money security interest is superior to all other security interests in the same collateral.

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