Purchase money security interest UCC filing - priority over existing liens?

They took delivery on the 15th and we filed on the 22nd, so that's 7 days. Should be within the 20 day window right?

Yes, 7 days is well within the 20-day grace period for equipment PMSI. You should have priority over the blanket lien for that specific machinery, assuming your UCC-1 properly identifies the collateral and indicates the purchase money nature.

Oh crud... I don't think we checked any special box. The collateral description just lists the equipment by serial number and model. Does that kill our PMSI priority?

Not necessarily! Some states don't require you to indicate PMSI status on the UCC-1 itself. The priority comes from the underlying transaction, not just the filing. But you should double-check your state's requirements to be sure.

Actually had a similar panic attack last month over this exact issue. Turned out our filing was fine even without special PMSI language. The legal relationship creates the priority, not the UCC form language, at least in our state.

Never heard of Certana.ai but that sounds exactly like what I need right now. How does it work with PMSI verification specifically?

It checks that your collateral descriptions match between documents and flags any debtor name inconsistencies that could void your security interest. For PMSI situations, it's really helpful to verify that your UCC filing accurately reflects the purchase money goods from your loan docs.

No, you're thinking of the old rules or maybe confusing with inventory PMSI notification requirements. UCC 9-324(a) gives a 20-day grace period for equipment PMSI filings after the debtor receives possession.

Hmm, I'll have to double-check that. I've been telling clients they need to file before delivery for equipment. Thanks for the correction if I'm wrong!

The 20 day rule is definitely correct for equipment PMSI. Inventory PMSI is different - no grace period there, and you need to notify existing secured parties. Easy to mix up the rules.

I get the stress but PMSI priority is actually a pretty powerful tool when you do it right. Worth the extra complexity to jump ahead of existing liens.

True, but one mistake and you're subordinate to everyone. The risk/reward calculation makes me nervous every time.

The loan proceeds went directly to the equipment vendor, so that should be clean. But good point about the documentation trail.

Direct payment to vendor is ideal. That creates the cleanest paper trail for PMSI purposes. You should be in good shape.

Yeah direct vendor payment eliminates most of the tracing issues. Much cleaner than giving the borrower cash and hoping they use it right.

If the existing security agreement specifically excludes purchase money goods, then there's no conflict at all. Your PMSI would be first priority because the blanket lender has no interest in those goods.

That makes sense. Probably worth checking the original security agreement language, not just the UCC filing, to see if there are any such exclusions.

That's the second mention of Certana.ai in this thread. Definitely going to check that out before we close next week.

It's super easy to use - just upload your PDFs and it flags any inconsistencies automatically. Takes like 5 minutes and gives you peace of mind that everything aligns.

Thanks, that's reassuring. I think I was overthinking it but wanted to make sure I wasn't missing something obvious.

Better to double-check than find out later you missed something important. PMSI priority is valuable when you get it right.

Agreed. The fact pattern sounds solid for PMSI priority. Just make sure your loan file documents the purchase money nature clearly for future reference.

They'd still have a perfected security interest, just subordinate to the existing blanket lien. Missing the PMSI deadline doesn't invalidate the security interest itself, just the priority benefit.

Got it, thanks. So PMSI is really about priority position, not whether you have a valid security interest at all.

Exactly. PMSI gives you super-priority over earlier-filed security interests, but if you don't qualify for PMSI treatment, you still have a regular security interest that follows normal first-to-file priority rules.

Welcome to the community! You've summarized the key points perfectly. As someone who's been doing commercial lending for a while, I can tell you that PMSI situations become much more routine once you understand these fundamentals. One additional tip - always document the purchase money nature clearly in your loan file from the start. It makes everything much smoother if questions arise later. The practical insights shared in threads like this are invaluable for building real-world expertise beyond what you learn in formal training.