2023 New York Laws › UCC - Uniform Commercial Code › Article 9 - Secured Transactions › Part 3 - Perfection and Priority › Sub Part 3 - Priority › 9-323 - Future Advances

Section 9--323. Future Advances.
(a) When  priority  based  on  time  of  advance.  Except as otherwise
provided in subsection (c), for purposes of determining the priority  of
a  perfected security interest under Section 9--322(a)(1), perfection of
the security interest dates from the time an  advance  is  made  to  the
extent that the security interest secures an advance that:
(1) is made while the security interest is perfected only:
(A) under Section 9--309 when it attaches; or
(B) temporarily under Section 9--312(e), (f), or (g); and
(2) is  not  made pursuant to a commitment entered into before or
while the security interest is perfected by  a  method  other
than under Section 9--309 or 9--312(e), (f), or (g).
(b) Lien creditor. Except as otherwise provided in subsections (c) and
(h),  a  security interest is subordinate to the rights of a person that
becomes a lien creditor to the extent that the security interest secures
an advance made more than 45  days  after  the  person  becomes  a  lien
creditor unless the advance is made:
(1) without knowledge of the lien; or
(2) pursuant  to  a  commitment entered into without knowledge of
the lien.
(c) Buyer of receivables. Subsections (a) and (b) do not  apply  to  a
security  interest  held by a secured party that is a buyer of accounts,
chattel paper, payment intangibles, or promissory notes or a consignor.
(d) Buyer of goods. Except as otherwise provided in subsection (e),  a
buyer  of  goods other than a buyer in ordinary course of business takes
free of a security interest to the extent that it secures advances  made
after the earlier of:
(1) the  time the secured party acquires knowledge of the buyer's
purchase; or
(2) 45 days after the purchase.
(e) Advances made pursuant to commitment: priority of buyer of  goods.
Subsection  (d)  does  not  apply  if  the advance is made pursuant to a
commitment entered into without knowledge of the  buyer's  purchase  and
before the expiration of the 45 day period.
(f) Lessee of goods. Except as otherwise provided in subsection (g), a
lessee  of  goods,  other  than a lessee in ordinary course of business,
takes the leasehold interest free of a security interest to  the  extent
that it secures advances made after the earlier of:
(1) the  time  the secured party acquires knowledge of the lease;
or
(2) 45 days after the lease contract becomes enforceable.
(g) Advances made pursuant to commitment: priority of lessee of goods.
Subsection (f) does not apply if the  advance  is  made  pursuant  to  a
commitment  entered  into  without knowledge of the lease and before the
expiration of the 45 day period.
(h) Priority with respect  to  cooperative  interests.  The  following
rules  apply  for purposes of determining under Section 9--322(a)(1) the
priority of a perfected security interest in a cooperative interest:
(1) Perfection of the security interest with respect to a  future
advance  dates  from  the  time  of  the filing under Section
9--310(d) if all of the following are true:
(A) The security agreement states the maximum  amount  to  be
advanced pursuant to commitment;
(B) The future advance is made pursuant to that commitment;
(C) The  future advance plus the outstanding sum of any prior
advances is not more than the stated maximum amount; and
(D) The filed  financing  statement  includes  a  cooperative
addendum  disclosing that the security agreement contains
a commitment to make future advances.
(2) Except  as  provided  in  paragraph  (1),  perfection  of the
security interest with respect to a future advance dates from
the time the advance is made.
(3) For purposes of paragraph (1), no  amendment  of  a  security
agreement  shall  adversely  affect the priority of any other
security interest in the same cooperative interest  that  was
perfected prior to the amendment.
(4) This  subsection  applies only to advances made subsequent to
an initial advance.