A PMSI (Purchase Money Security Interest) Primer

What is a PMSI?

Under the Personal Property Securities Act 2009 (Cth) (PPSA), the purchase money security interest (PMSI) is a special type of security interest which has "super priority" over other security interests if it is registered on the Personal Property Securities Register (PPSR) within the required timeframes.

Four kinds of PMSI

There are four types of PMSIs:

• A security interest taken in collateral, to the extent that it secures all or part of its purchase price.

• Example: Andrew sells goods to Ben on retention of title terms. Andrew has a PMSI in the goods.

• A security interest taken in collateral by a person who gives value for the purpose of enabling the grantor to acquire rights in the collateral, to the extent that the value is applied to acquire those rights.