N.Y.
Uniform Commercial Code Law Section 9-324
Priority of Purchase-money Security Interests
(a)
General rule: purchase-money priority. Except as otherwise provided in subsection (g), a perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods, and, except as otherwise provided in Section 9--327, a perfected security interest in its identifiable proceeds also has priority, if the purchase-money security interest is perfected when the debtor receives possession of the collateral or within 20 days thereafter. * (b) Inventory purchase-money priority. Subject to subsection (c) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if so provided in Section 9--330, and, except as otherwise provided in Section 9--327, also has priority in identifiable cash proceeds of the inventory to the extent the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if:(1)
the purchase-money security interest is perfected when the debtor receives possession of the inventory;(2)
the purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest;(3)
the holder of the conflicting security interest receives the notification within five years before the debtor receives possession of the inventory; and(4)
the notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory. * NB Effective until June 3, 2026 * (b) Inventory purchase-money priority. Subject to subsection (c) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if so provided in Section 9--330, and, except as otherwise provided in Section 9--327, also has priority in identifiable cash proceeds of the inventory to the extent the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if:(1)
the purchase-money security interest is perfected when the debtor receives possession of the inventory;(2)
the purchase-money secured party sends a signed notification to the holder of the conflicting security interest;(3)
the holder of the conflicting security interest receives the notification within five years before the debtor receives possession of the inventory; and(4)
the notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory. * NB Effective June 3, 2026 (c) Holders of conflicting inventory security interests to be notified. Subsections (b)(2) through (4) apply only if the holder of the conflicting security interest had filed a financing statement covering the same types of inventory:(1)
if the purchase-money security interest is perfected by filing, before the date of the filing; or(2)
if the purchase-money security interest is temporarily perfected without filing or possession under Section 9--312(f), before the beginning of the 20-day period thereunder. * (d) Livestock purchase-money priority. Subject to subsection (e) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in livestock that are farm products has priority over a conflicting security interest in the same livestock, and, except as otherwise provided in Section 9--327, a perfected security interest in their identifiable proceeds and identifiable products in their unmanufactured states also has priority, if:(1)
the purchase-money security interest is perfected when the debtor receives possession of the livestock;(2)
the purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest;(3)
the holder of the conflicting security interest receives the notification within six months before the debtor receives possession of the livestock; and(4)
the notification states that the person sending the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock. * NB Effective until June 3, 2026 * (d) Livestock purchase-money priority. Subject to subsection (e) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in livestock that are farm products has priority over a conflicting security interest in the same livestock, and, except as otherwise provided in Section 9--327, a perfected security interest in their identifiable proceeds and identifiable products in their unmanufactured states also has priority, if:(1)
the purchase-money security interest is perfected when the debtor receives possession of the livestock;(2)
the purchase-money secured party sends a signed notification to the holder of the conflicting security interest;(3)
the holder of the conflicting security interest receives the notification within six months before the debtor receives possession of the livestock; and(4)
the notification states that the person sending the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock. * NB Effective June 3, 2026 (e) Holders of conflicting livestock security interests to be notified. Subsections (d)(2) through (4) apply only if the holder of the conflicting security interest had filed a financing statement covering the same types of livestock:(1)
if the purchase-money security interest is perfected by filing, before the date of the filing; or(2)
if the purchase-money security interest is temporarily perfected without filing or possession under Section 9--312(f), before the beginning of the 20-day period thereunder.(f)
Software purchase-money priority. Except as otherwise provided in subsection (g), a perfected purchase-money security interest in software has priority over a conflicting security interest in the same collateral, and, except as otherwise provided in Section 9--327, a perfected security interest in its identifiable proceeds also has priority, to the extent that the purchase-money security interest in the goods in which the software was acquired for use has priority in the goods and proceeds of the goods under this section.(g)
Conflicting purchase-money security interests. If more than one security interest qualifies for priority in the same collateral under subsection (a), (b), (d), or(f)
:(1)
a security interest securing an obligation incurred as all or part of the price of the collateral has priority over a security interest securing an obligation incurred for value given to enable the debtor to acquire rights in or the use of collateral; and(2)
in all other cases, Section 9--322(a) applies to the qualifying security interests.
Source:
Section 9-324 — Priority of Purchase-money Security Interests, https://www.nysenate.gov/legislation/laws/UCC/9-324 (updated Dec. 12, 2025; accessed Dec. 13, 2025).
