Does a security interest in non-consumer goods lose its status as a PMSI?

A security interest in non-consumer goods can retain its status as a Purchase Money Security Interest (PMSI) under certain conditions, which is why this answer is correct. A PMSI is typically established when a seller provides financing to a buyer specifically to enable the purchase of goods, or when the buyer uses the goods purchased as collateral for a loan.

For non-consumer goods, if the security interest is created in the course of a seller-financed transaction or through the financing of the acquisition of the collateral, it can still maintain PMSI status. This is contingent upon the secured party satisfying specific requirements, such as properly perfecting the security interest and ensuring it is attached in the manner prescribed by the UCC.

Understanding that PMSI status can be retained even in non-consumer contexts is essential because it allows secured parties to have a superior claim on the collateral in the event of a default. Factors such as whether the goods have been sold or transformed can also influence this outcome, but the core idea remains that compliance with UCC requirements can allow the PMSI to persist.