Section 409.323. Future advances.

 

(1)   When priority based on time of advance. Except as otherwise provided in sub. (3) , for purposes of determining the priority of a perfected security interest under s. 409.322 (1) (a) , perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance that:

(a) Is made while the security interest is perfected only:

1. Under s. 409.309 when it attaches; or

2. Temporarily under s. 409.312 (5) , (6) , or (7) ; and

(b) Is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under s. 409.309 or 409.312 (5) , (6) , or (7) .

(2)   Lien creditor. Except as otherwise provided in sub. (3) , 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:

(a) Without knowledge of the lien; or

(b) Pursuant to a commitment entered into without knowledge of the lien.

(3)   Buyer of receivables. Subsections (1) and (2) 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.

(4)   Buyer of goods. Except as otherwise provided in sub. (5) , 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:

(a) The time the secured party acquires knowledge of the buyer's purchase; or

(b) Forty-five days after the purchase.

(5)   Advances made pursuant to commitment: priority of buyer of goods. Subsection (4) 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.

(6)   Lessee of goods. Except as otherwise provided in sub. (7) , 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:

(a) The time the secured party acquires knowledge of the lease; or

(b) Forty-five days after the lease contract becomes enforceable.

(7)   Advances made pursuant to commitment: priority of lessee of goods. Subsection (6) 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.

2001 a. 10 .