Bank makes a loan to Debtor. As collateral, Debtor grants Bank a security interest, properly perfected by a UCC-1 filing, in all of Debtor’s equipment (Debtor owns a laundromat). The security agreement also provides that Bank’s security interest in Debtor’s equipment secures any future advances Bank makes to Debtor. Bank initially loaned Debtor $5,000. Three months later, on September 1, 2012, Bob, in order to satisfy a $20,000 judgment obtained against Debtor, had Sheriff levy on five of Debtor’s commercial laundry machines. On November 17, 2012 Bank, without knowledge of the lien on the machines, loaned Bank an additional $10,000 (for a total balance of $15,000). Bank has priority over Bob in the machines to the extent of:
1. $5,000, because the $10,000 future advance was made more than 45 days after Bob acquired its lien.
2. $15,000, because the $10,000 future advance was made within 90 days after Bob acquired its lien.
3. $0.00, because any interest Bank has in the machines is subordinate to the rights of a lien creditor, such as Bob.
4. $15,000, provided that Bob did not notify Bank of its lien and Bank did not otherwise know about it prior to making the future advance of $10,000.