UCC Document Community

Good luck with the filing! Feel free to post back if you run into any issues.

Hope it goes smoothly. The verification step really does make a difference in catching those small but critical details.

Great question! You definitely want to file as soon as possible after closing to secure your priority position. I typically file the UCC-1 on the same day as closing or within 24-48 hours max. The key is making sure your security agreement is fully executed first since that's what gives you the security interest - the UCC filing just perfects it. Some lenders even file a few days before closing once they know the deal will fund, then record the security agreement at closing. Just don't wait too long or you risk another creditor jumping ahead of you in line!

Smart move getting counsel involved early. Original debtor priority disputes can get expensive if they're not handled properly from the start.

Agreed. Better to spend money on prevention than litigation after the fact.

This is excellent advice, especially about getting proof of satisfaction from the seller. I'd also suggest checking if your purchase agreement included any warranties about clear title or lien-free transfer - that could give you recourse against the seller if they failed to properly clear existing encumbrances. The title insurance angle is smart too, though I'm not sure how many carriers will write policies that cover UCC filing priority disputes.

Great points about the purchase agreement warranties. I'd add that you should also check if your loan documents include any representations from the borrower about the equipment being free and clear of liens. If they warranted that to you, it gives you additional leverage to make them resolve this. Also, since this involves equipment from 2019, there might be depreciation issues that affect the actual value at stake - sometimes it's worth doing a quick appraisal to see if the cost of fighting over priority exceeds the collateral value. The seller definitely dropped the ball here, and they should be the ones fixing it.

Great outcome. Always satisfying when a complex filing finally gets accepted after all that work.

This thread will be helpful for others dealing with similar international collateral issues. The fixture vs. mobile equipment distinction is crucial.

Thanks for that comprehensive breakdown! As someone new to international secured transactions, I'm curious about the timing aspects. When you have mobile equipment that might move between facilities in different countries, how do you handle the potential gap in perfection while the equipment is in transit? Is there a grace period, or do you need to have filings ready in the destination country before the equipment moves?

How accurate is their name matching? Does it catch subtle differences like the comma issue mentioned above?

Yes, it's pretty thorough. I've used it for several Virginia filings and it caught punctuation differences I never would have noticed manually.

One last thing - make sure your equipment lender is comfortable with this structure. Some lenders prefer to see clean first priority positions rather than relying on subordination agreements.

Absolutely agree with Freya's point - I'd recommend having a frank conversation with your equipment lender about their comfort level with subordination structures before finalizing everything. Some lenders have internal policies that require first lien positions regardless of subordination agreements, especially for equipment deals. Better to know now if they'll push back on the structure rather than find out at closing.

This insurance discussion has been incredibly enlightening - I hadn't considered half of these scenarios! One thing I'm curious about is how you handle the documentation trail for insurance proceeds when there are multiple endorsements required. Do you typically require the borrower to provide copies of all insurance correspondence to both lenders simultaneously, or does each lender manage their own communication with the carrier? I'm also wondering about the practical issue of check endorsement - if the SBA is slow to endorse (which seems to be a theme in this thread), does that hold up the equipment lender's ability to access proceeds even with subordination in place? And what about situations where the borrower might be in default to one lender but current with the other at the time of loss - does that affect how insurance proceeds get distributed according to the subordination agreement?

This insurance thread has been incredibly valuable! As someone just getting into secured transactions, I'm realizing how many moving parts there are beyond just the basic UCC filings. On your question about documentation trails, I'd think requiring borrowers to copy both lenders simultaneously on all insurance correspondence would be essential - creates transparency and prevents any "I didn't know" issues later. For the check endorsement delays, maybe the subordination agreement could include language allowing the equipment lender to deposit the check into an escrow account pending SBA endorsement, so at least the proceeds are secured even if not immediately accessible? And regarding default status affecting distribution - that's a great point that probably needs specific language in the subordination agreement about whether a borrower's default to one lender impacts the other lender's rights to insurance proceeds. This whole discussion really shows why these deals need such careful documentation upfront!