Purchase Money Security Interest (PMSI)

A PMSI is a special category of security interest that may have super-priority over other types of security interests. A valid PMSI registration which has super-priority means you go straight to the top of the creditor list whenever you need to recover your property or its value from insolvency practitioners.

There are strict requirements to create a PMSI and these include:

  • The financing statement must identify the security interest as a PMSI at the time of registration.
  • The PMSI must be registered on the PPSR before delivery of the inventory or within 15 days after delivery (if the personal property is not inventory).

The main types of PMSIs include PPS leases and the sale of goods on a Retention of Title basis. 

You must choose PMSI when you first register your security interest, as you can’t change it later to indicate PMSI.