perfected security interest. A security interest that complies with the statutory requirements for achieving priority over a trustee in bankruptcy and unperfected interests. • A perfected interest may also have priority over another interest that was perfected later in time. See PERFECT. [Cases: Secured Transactions 81–96, 138–145. C.J.S. Secured Transactions §§ 3, 50–51, 53–77, 88, 90–102, 105–107, 118.]
purchase-money security interest. A security interest that is created when a buyer uses the lender’s money to make the purchase and immediately gives the lender security (UCC § 9-103); a security interest that is either (1) taken or retained by the seller of the collateral to secure all or part of its price or (2) taken by a person who by making advances or incurring an obligation gives value to enable the debtor to acquire rights in or the use of collateral if that value is in fact so used. • If a buyer’s purchase of a boat, for example, is financed by a bank that loans the amount of the purchase price, the bank’s security interest in the boat that secures the loan is a purchase-money security interest. — Abbr. PMSI.
— Also termed purchase-money interest. [Cases: Secured Transactions 83, 146. C.J.S. Secured Transactions §§ 10, 55, 103–105.]
unperfected security interest. A security interest held by a creditor who has not established priority over any other creditor. • The only priority is over the debtor. [Cases: Secured Transactions 139. C.J.S. Secured Transactions § 91.]
