Certified Lease & Finance Professional (CLFP) Class Practice Exam

PMSI priority in a lease hinges on timely filing. When the financing party uses the borrowed funds to acquire the equipment and secures the obligation with that equipment, they can have a PMSI in the collateral. In a leasing scenario, this PMSI is perfected by filing a UCC-1 within 20 days after the lessee takes possession of the equipment. That 20-day window is what gives the PMSI its priority over other secured creditors who may later attach or perfect. If the filing is after that period, the PMSI may still exist but lose its special priority. So the true statement is that filing within 20 days of the lessee taking possession is required to obtain the PMSI. The other ideas—that you can obtain a PMSI in any equipment without timing, that no UCC filing is needed, or that PMSI only applies to real property—are not correct because PMSI creation and priority depend on both qualifying financing of the collateral and timely perfection, and PMSIs concern personal property, not real property.