Arkansas Code Annotated

Ark. Code Ann. § 4-9-103 (2026)

Purchase-money security interest — Application of payments — Burden of establishing

✓ current as of May 2026

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In this section:
1. “purchase-money collateral” means goods or software that secures a purchase-money obligation incurred with respect to that collateral; and
2. “purchase-money obligation” means an obligation of an obligor incurred as all or part of the price of the collateral or for value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used.
A security interest in goods is a purchase-money security interest:
1. to the extent that the goods are purchase-money collateral with respect to that security interest;
2. if the security interest is in inventory that is or was purchase-money collateral, also to the extent that the security interest secures a purchase-money obligation incurred with respect to other inventory in which the secured party holds or held a purchase-money security interest; and
3. also to the extent that the security interest secures a purchase-money obligation incurred with respect to software in which the secured party holds or held a purchase-money security interest.
A security interest in software is a purchase-money security interest to the extent that the security interest also secures a purchase-money obligation incurred with respect to goods in which the secured party holds or held a purchase-money security interest if:
1. the debtor acquired its interest in the software in an integrated transaction in which it acquired an interest in the goods; and
2. the debtor acquired its interest in the software for the principal purpose of using the software in the goods.
The security interest of a consignor in goods that are the subject of a consignment is a purchase-money security interest in inventory.
In a transaction other than a consumer-goods transaction, if the extent to which a security interest is a purchase-money security interest depends on the application of a payment to a particular obligation, the payment must be applied:
1. in accordance with any reasonable method of application to which the parties agree;
2. in the absence of the parties' agreement to a reasonable method, in accordance with any intention of the obligor manifested at or before the time of payment; or
3. in the absence of an agreement to a reasonable method and a timely manifestation of the obligor's intention, in the following order:
  1. to obligations that are not secured; and
  2. if more than one (1) obligation is secured, to obligations secured by purchase-money security interests in the order in which those obligations were incurred.
In a transaction other than a consumer-goods transaction, a purchase-money security interest does not lose its status as such, even if:
1. the purchase-money collateral also secures an obligation that is not a purchase-money obligation;
2. collateral that is not purchase-money collateral also secures the purchase-money obligation; or
3. the purchase-money obligation has been renewed, refinanced, consolidated, or restructured.
In a transaction other than a consumer-goods transaction, a secured party claiming a purchase-money security interest has the burden of establishing the extent to which the security interest is a purchase-money security interest.
The limitation of the rules in subsections (e), (f), and (g) to transactions other than consumer-goods transactions is intended to leave to the court the determination of the proper rules in consumer-goods transactions. The court may not infer from that limitation the nature of the proper rule in consumer-goods transactions and may continue to apply established approaches.

History. Acts 2001, No. 1439, § 1.

Research References

ALR.

Consignment Transactions Under Uniform Commercial Code Article 9 on Secured Transactions. 58 A.L.R.6th 289.

Case Notes

Chattel Mortgages.

A chattel mortgage securing a note given for the purchase of farm machinery was a “purchase money security interest” within the meaning of former § 4-9-107. Lonoke Production Credit Ass'n v. Bohannon, 238 Ark. 206, 379 S.W.2d 17 (1964) (decision under prior law).

Landlord's Lien.

When the legislature adopted the landlord's lien in 1987 (§ 18-16-108), it was mindful of this state's longstanding aversion to a landlord's lien and of the strict construction that would be applied to such legislation, and was also aware of the law and policies embodied in the U.C.C.; the legislature never intended a landlord's lien which arose simultaneously with a purchase money security interest, under former § 4-9-107 and § 4-9-312(4), to have priority. Herringer v. Mercantile Bank, 315 Ark. 218, 866 S.W.2d 390 (1993) (decision under prior law).

Cited: United States v. Baptist Golden Age Home, 226 F. Supp. 892 (W.D. Ark. 1964); Niedermeier v. Central Prod. Credit Ass'n, 300 Ark. 116, 777 S.W.2d 210 (1989); Womack v. Newman Fixture Co., 27 Ark. App. 117, 766 S.W.2d 949 (1989); Meeks v. W. Mercedes Benz Credit Corp., 257 F.3d 843 (8th Cir. 2001).

Notes of Decisions

Cited in 8 cases (1 in the last 5 years), 1990–2025 · leading case: Meeks v. Mercedes-Benz Credit Corp. (In Re Stinnett), 241 B.R. 599 (Bankr. W.D. Ark. 1999).

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Meeks v. Mercedes-Benz Credit Corp. (In Re Stinnett), 241 B.R. 599 (Bankr. W.D. Ark. 1999). · cites it 4× “Since Oklahoma requires that liens be noted on the certificate, and Arkansas choice of law provides that Oklahoma law thus applies, Ark.Code Ann. § 4-9-103(2), Mercedes-Benz’ security interest is controlled by Oklahoma law.”

In re Williams, 381 B.R. 742 (Bankr. W.D. Ark. 2008). · cites it 2× “§ 2301 (1)(2008) and Black’s Law Dictionary 317 (6th ed.1990). A security interest in goods is a purchase money security interest “to the extent that the goods are purchase-money collateral with respect to that security interest.”

Beebe v. MacMillan Petroleum (Arkansas), Inc. (In Re MacMillan Petroleum (Arkansas), Inc.), 115 B.R. 175 (Bankr. W.D. Ark. 1990). · cites it 2× “Ark. Code Ann. §§ 4-9-103 (5), 4-1-105(2) (1987); Tex.”

William S. Meeks, Tr. v. Mercedes Benz Credit Corp., Billy Harold Stinnett Terry Lynn Stinnett, Debtors, 257 F.3d 843 (8th Cir. 2001). · cites it 2× “law of which security interest must be indicated on certificate as condition of perfection — perfection of security interest is governed by law of jurisdiction issuing certifícate of title; law continues to govern until goods are registered in another jurisdiction); Okla.”

Helena Agri-Enter., LLC v. Simmons Bank (Ark. Ct. App. 2025). · cites it 2× “The exception to this rule is 2 Arkansas Code Annotated section 4-9-103(b) (Repl. 2020) provides in relevant part that “[a] security interest in goods is a purchase-money security interest: (1) to the extent that the goods are purchase-money collateral with respect to that…”

Krigel v. Mercedes-Benz Credit Corp. (In re Stanley), 249 B.R. 509 (W.D. Mo. 2000). “1999) (stating that Ark.Code Ann. § 4-9-103(2)(b) serves to continue perfection of a security interest noted on a foreign certificate of title until a certificate has been issued by another jurisdiction); In re Males, 999 F.”

Earl Betts & Amy Betts v. Usaa Gen. Indem. Co., 2020 Ark. App. 426 (Ark. Ct. App. 2020). · cites it 2× “” 9 Ark. Code Ann. § 4-9-103 cmt. 3. The Bettses agreed that Ally would be a loss payee in the retail-installment contract, so just because Ally was not identified as a loss payee in USAA’s declarations page does not mean that it did not have an equitable lien on the USAA…”

William S. Meeks v. Mercedes Benz Credit (8th Cir. 2001). “1999) (where goods are covered by certificate of title issued under statute of another jurisdiction--under law of which security interest must be indicated on certificate as condition of perfection--perfection of security interest is governed by law of jurisdiction issuing…”

— Ark. Code Ann. § 4-9-103(2) — 2 cases

Meeks v. Mercedes-Benz Credit Corp. (In Re Stinnett), 241 B.R. 599 (Bankr. W.D. Ark. 1999). “Since Oklahoma requires that liens be noted on the certificate, and Arkansas choice of law provides that Oklahoma law thus applies, Ark.Code Ann. § 4-9-103(2), Mercedes-Benz’ security interest is controlled by Oklahoma law.”

William S. Meeks, Tr. v. Mercedes Benz Credit Corp., Billy Harold Stinnett Terry Lynn Stinnett, Debtors, 257 F.3d 843 (8th Cir. 2001). “law of which security interest must be indicated on certificate as condition of perfection — perfection of security interest is governed by law of jurisdiction issuing certifícate of title; law continues to govern until goods are registered in another jurisdiction); Okla.”

— Ark. Code Ann. § 4-9-103(2)(b) — 2 cases

— Ark. Code Ann. § 4-9-103(b) — 1 case

Helena Agri-Enter., LLC v. Simmons Bank (Ark. Ct. App. 2025). “The exception to this rule is 2 Arkansas Code Annotated section 4-9-103(b) (Repl. 2020) provides in relevant part that “[a] security interest in goods is a purchase-money security interest: (1) to the extent that the goods are purchase-money collateral with respect to that…”

— Ark. Code Ann. § 4-9-103(b)(l) — 1 case

In re Williams, 381 B.R. 742 (Bankr. W.D. Ark. 2008). “§ 2301 (1)(2008) and Black’s Law Dictionary 317 (6th ed.1990). A security interest in goods is a purchase money security interest “to the extent that the goods are purchase-money collateral with respect to that security interest.”

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