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Arkansas Code Annotated

Ark. Code Ann. § 4-9-324 (2026)

Priority of purchase-money security interests

✓ current as of May 2026
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  1. 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 § 4-9-327, 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 twenty (20) days thereafter.
  2. 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 § 4-9-330, and, except as otherwise provided in § 4-9-327, 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 (5) 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.
  3. Subdivisions (b)(2)-(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 § 4-9-312(f), before the beginning of the 20-day period thereunder.
  4. 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 § 4-9-327, 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.
  5. Subdivisions (d)(2)-(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 § 4-9-312(f), before the beginning of the twenty-day period thereunder.
  6. 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 § 4-9-327, 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.
  7. 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, § 4-9-322(a) applies to the qualifying security interests.

History. Acts 2001, No. 1439, § 1.

Case Notes

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 this subtitle; the legislature never intended a landlord's lien which arose simultaneously with a purchase money security interest (former § 4-9-107 and former § 4-9-312(4)) to have priority. Herringer v. Mercantile Bank, 315 Ark. 218, 866 S.W.2d 390 (1993) (decision under prior law).

While a landlord's lien under § 18-16-108 is not a security interest under this subtitle, and therefore not a “conflicting security interest” under this section, the landlord's lien operates, in effect, as a floating lien on after-acquired property (former § 4-9-204); it was exactly this kind of lien for which former § 4-9-312 was structured, in order to protect the purchase money lien creditor. Herringer v. Mercantile Bank, 315 Ark. 218, 866 S.W.2d 390 (1993) (decision under prior law).

Purchase Money Lien.

The purchase money lien of a vendor in an air conditioning unit, a cooling tower, a kitchen range and oven, and duct work supplied by such vendor, to have priority over conflicting liens had to be perfected within statutory period after delivery to the debtor under the pre-2001 version of this chapter. House v. Long, 244 Ark. 718, 426 S.W.2d 814 (1968) (decision under prior law).

Under the pre-2001 version of this chapter, the purchase money party must be one who gives value by making advances or incurring an obligation, excluding from the purchase money category any security interest taken as security or satisfaction for a preexisting claim or antecedent debt. Niedermeier v. Central Prod. Credit Ass'n, 300 Ark. 116, 777 S.W.2d 210 (1989) (decision under prior law).

Purchase-Money Security Interest.

In a bank's suit to recover a judgment against debtors, the trial court did not err in holding that the bank's security interests in the debtors' crops and crop proceeds had priority over appellants' purchase money security interest because the bank had a first-in-time lien on the crops; § 4-9-324 did not give a super priority to agricultural supplier liens. Searcy Farm Supply, LLC v. Merchs. & Planters Bank, 369 Ark. 487, 256 S.W.3d 496 (2007).

Direct lienholder was not entitled to summary judgment under subsection (a) of this section as there were material issues of fact as to whether the dealership was authorized to sell the vehicles at issue. Ford Motor Credit Co., LLC v. First Nat'l Bank of Crossett, 2016 Ark. App. 408, 500 S.W.3d 188 (2016).

Notes of Decisions
Cited in 3 cases (1 in the last 5 years), 2007–2025 · leading case: Searcy Farm Supply, LLC v. Merchants & Planters Bank, 256 S.W.3d 496 (Ark. 2007).
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Searcy Farm Supply, LLC v. Merchants & Planters Bank, 256 S.W.3d 496 (Ark. 2007). · cites it 17× “Relying upon Ark. Code Ann. § 4-9-324 (Repl. 2001), Appellants assert a superpriority status because section 4-9-324 “is broad enough to encompass a ‘seedmoney lender’ as a purchase money security interest holder.”
Ford Motor Credit Co. v. First Nat'l Bank of Crossett, 2016 Ark. App. 408 (Ark. Ct. App. 2016). · cites it 4× “FMCC cites to Ark. Code Ann. § 4-9-324 (a) (Repl 2001), which states that a perfected security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods, if the purchase-money security interest is perfected at the…”
Helena Agri-Enter., LLC v. Simmons Bank (Ark. Ct. App. 2025). · cites it 4× “Ark. Code Ann. § 4-9-324 (a) (Repl. 2020).”
— Ark. Code Ann. § 4-9-324(a) — 2 cases
Ford Motor Credit Co. v. First Nat'l Bank of Crossett, 2016 Ark. App. 408 (Ark. Ct. App. 2016). “FMCC cites to Ark. Code Ann. § 4-9-324 (a) (Repl 2001), which states that a perfected security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods, if the purchase-money security interest is perfected at the…”
Helena Agri-Enter., LLC v. Simmons Bank (Ark. Ct. App. 2025). “Ark. Code Ann. § 4-9-324 (a) (Repl. 2020).”
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