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Thanks everyone - this has been super helpful. Sounds like the consensus is to file a UCC-3 termination using the exact debtor name from the original UCC-1, even though the debt converted and the entity changed names. I'll get that filed this week.
Kayla Morgan
•Smart move. And don't forget to keep copies of both the original UCC-1 and the termination statement in your corporate records for future reference.
Exactly. Clean documentation now will save you headaches during your next financing or exit process.
Zadie Patel
This thread is incredibly helpful! I'm new to UCC filings and had no idea that convertible note conversions required manual termination. Just to clarify - is this requirement the same across all states, or are there jurisdictions where the conversion might automatically release the security interest? Also, for those who mentioned using document verification tools, how critical is that step versus just carefully reviewing the original filing yourself?
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Arjun Kurti
Quick question for my own knowledge - if they had missed the 20 day filing deadline, would they still have a security interest, just without PMSI priority? Or would they be completely unsecured?
Arjun Kurti
•Got it, thanks. So PMSI is really about priority position, not whether you have a valid security interest at all.
Exactly. PMSI gives you super-priority over earlier-filed security interests, but if you don't qualify for PMSI treatment, you still have a regular security interest that follows normal first-to-file priority rules.
NebulaNomad
This thread has been really helpful! I'm new to commercial lending and PMSI situations always seemed intimidating, but reading through everyone's explanations makes it much clearer. The key takeaways I'm getting are: 1) 20-day grace period for equipment PMSI after delivery, 2) direct vendor payment creates clean purchase money trail, 3) PMSI priority comes from the transaction itself not just UCC language, and 4) missing PMSI deadline doesn't kill your security interest, just the super-priority. Thanks to everyone who contributed - this is exactly the kind of practical knowledge that's hard to find in textbooks!
PrinceJoe
•Welcome to the community! You've summarized the key points perfectly. As someone who's been doing commercial lending for a while, I can tell you that PMSI situations become much more routine once you understand these fundamentals. One additional tip - always document the purchase money nature clearly in your loan file from the start. It makes everything much smoother if questions arise later. The practical insights shared in threads like this are invaluable for building real-world expertise beyond what you learn in formal training.
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Update: I ended up filing both a regular UCC1 and a fixture filing. Used exact legal names from the LLC articles, included detailed descriptions of the equipment and its attachment to the premises, and got both filings accepted without any issues. Thanks to everyone who helped talk through this! The dual filing approach gave me much better peace of mind.
Smart move! Glad it worked out. It's always better to be comprehensive with UCC filings, especially when there's any question about fixture status.
Excellent outcome. Your borrower is lucky to have a lender who takes lien perfection seriously. Too many people cut corners on UCC filings and regret it later.
As someone new to commercial lending, this thread has been incredibly educational! I'm curious about the timing aspect - how far in advance of funding should you file these UCC statements? And if you're doing both a regular UCC1 and fixture filing, do they need to be filed simultaneously or can there be a gap between them? I want to make sure I understand the proper sequence for future deals.
Great questions! For timing, I always recommend filing before funding - ideally at least a few days to ensure the filings are properly recorded. As for the sequence, while simultaneous filing is ideal, there can be a small gap between them without losing perfection as long as both are filed before you advance the loan funds. The key is that your security interest attaches when you have a signed security agreement, give value (fund the loan), and the debtor has rights in the collateral. Just make sure both filings are complete before that final funding step. Some lenders file the UCC1s as a closing condition and don't release funds until they have confirmation of accepted filings.
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Alana Willis
This thread is making me grateful I mostly deal with continuation filings and terminations. The recording tax on new UCC-1 filings in Tennessee sounds like a major headache. At least continuations are just the standard fee without all these additional taxes.
Tyler Murphy
•Yeah, continuations are much simpler. Just the $15 filing fee and you're done. No recording tax calculations or collateral value assessments to worry about.
Sara Unger
•I wish I could use Certana.ai's verification tool on my continuations too. Sometimes I worry about debtor name changes or other issues that might affect the continuation, but it's mainly designed for UCC-1 and amendment filings.
Welcome to the Tennessee UCC recording tax club! I just went through this same nightmare last month with a $450 surprise fee on agricultural equipment financing. What really got me was that my paralegal had filed dozens of UCCs in other states without any issues, but Tennessee's system is completely different. The recording tax seems to kick in around the $150K collateral value threshold, and like others mentioned, the way you describe the equipment matters a lot. I ended up having to explain the unexpected cost to my client after the fact, which was embarrassing. Now I always call the Tennessee SOS directly before filing anything over $100K just to get a ballpark estimate of total costs. Their phone system is terrible like someone mentioned, but if you can get through, they'll at least tell you if your collateral description is likely to trigger the higher tax brackets.
Melissa Lin
Don't forget about termination procedures either. When the loan is paid off, you'll need to terminate the fixture filing in both the UCC records and the real estate records. It's not automatic and forgotten fixture filings can cloud real estate titles.
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Gabriel Ruiz
•Exactly. Clean terminations are just as important as proper initial filings. Title companies will flag lingering fixture filings during property sales.
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Ezra Beard
•I always remind my clients about termination requirements upfront so they budget for the dual filing fees at the end too.
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Noah huntAce420
Thanks everyone for all the detailed advice! This has been incredibly helpful. Just to summarize what I'm understanding: I need to file a UCC-1 fixture filing that goes into both UCC records AND real estate records, include a detailed legal property description (not just street address), verify my leasehold interest is sufficient, be prepared for dual filing fees throughout the life of the loan including continuations and termination, and make sure the collateral description is specific enough for fixture filing standards. I'm going to check out Certana.ai to verify my documents are consistent before filing, and I'll call the county clerk ahead of time to confirm their specific procedures. Did I miss anything major?
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Santiago Martinez
•That's a really solid summary! You've captured all the key points. One small thing I'd add - make sure to double-check your state's specific requirements since some states have nuances around debtor authorization for fixture filings or special forms. But it sounds like you have a great plan and the right resources lined up. Good luck with your filing!
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