Purchase Money Security Interest (PMSI)

A Purchase Money Security Interest (PMSI) is a legal claim a seller or lender has on goods they've provided to a buyer as part of a credit arrangement, securing their loan or credit. This interest ensures that if the buyer defaults, the seller or lender can take back and sell the goods to recover the owed money. PMSIs are designed to prioritize the rights of the creditor who supplied the goods, making them a key tool in secured transactions involving the sale of inventory, equipment, or other tangible assets.