                                 CODE OF VIRGINIA

FUTURE ADVANCES (§ 8.9A-323)

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 § 8.9A-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 &#xA7; 8.9A-309 when it attaches; or

B. temporarily under § 8.9A-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 &#xA7; 8.9A-309 or
   &#xA7; 8.9A-312 (e), (f), or (g).

b. Lien creditor. Except as otherwise provided in subsection (c), 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
forty-five 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 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&#8217;s
   purchase; or

   2. forty-five 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&#8217;s purchase and before the expiration of the
forty-five day period.

f. Lessee of goods. Except as otherwise provided in subsection (g), a lessee of
goods 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.

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 forty-five day
period.

HISTORY: Code 1950, § 43-27; 1964, c. 219, §§ 8.9-301, 8.9-307, 8.9-312;
1966, c. 557; 1973, c. 509; 1983, c. 204; 1984, c. 613; 1991, c. 536, §
8.2A-307; 1996, c. 216; 2000, c. 1007; 2024, c. 652.