A purchase money security interest in noninventory collateral prevails over a prior perfected security interest if the purchase money security interest is perfected at the time the debtor takes possession or within twenty (20) days afterward.

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This is known as the "purchase money priority rule" under Article 9 of the Uniform Commercial Code. It applies to noninventory collateral such as equipment, vehicles, or other goods that are purchased with financing provided by the same creditor who then takes a security interest in that collateral. As long as the purchase money security interest is perfected within 20 days of the debtor taking possession, it will have priority over any prior perfected security interests in the same collateral.

A Purchase Money Security Interest in Noninventory Collateral Prevails Over