Future Advances

1. Law
2. Georgia Code
3. Commercial Code
4. Secured Transactions
5. Perfection and Priority
6. Future Advances

1. When priority based on time of advance. Except as otherwise provided in subsection (b) of this Code section, for purposes of determining the priority of a perfected security interest under paragraph (1) of subsection (a) of Code Section 11-9-322, 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:
      1. Under Code Section 11-9-309 when it attaches; or
      2. Temporarily under subsection (e), (f), or (g) of Code Section 11-9-312; 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 Code Section 11-9-309 or subsection (e), (f), or (g) of Code Section 11-9-312.
2. Buyer of receivables. Subsection (a) of this Code section does 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.
3. Buyer of goods. Except as otherwise provided in subsection (d) of this Code section, 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. Forty-five days after the purchase.
4. Advances made pursuant to commitment; priority of buyer of goods. Subsection (c) of this Code section 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.
5. Lessee of goods. Except as otherwise provided in subsection (f) of this Code section, 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. Forty-five days after the lease contract becomes enforceable.
6. Advances made pursuant to commitment; priority of lessee of goods. Subsection (e) of this Code section 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.

(Code 1981, §11-9-323, enacted by Ga. L. 2001, p. 362, § 1.)

RESEARCH REFERENCES

U.L.A.

- Uniform Commercial Code (U.L.A.) § 9-323.

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