UCC Document Community

One more thought - while notarization isn't required, make sure you have proper corporate authority if your debtor is an entity. Board resolutions, operating agreements, whatever is needed to show the person signing has authority to grant the security interest.

Just jumping in as someone new to UCC work - this thread has been incredibly helpful! I'm working on my first secured transaction and was wondering about the same notarization question. One follow-up: when you say the security agreement needs "authentication by debtor," does that mean it has to be an original signature or can it be electronically signed? Our client is asking about using DocuSign for the security agreement.

Bottom line - yes you can likely proceed with self-help repo if done peacefully, but you need proper notice for disposition afterward. The debtor keeps redemption rights until you actually sell the collateral. Plan accordingly and document everything.

Having gone through several Article 9 repossessions myself, I'd strongly recommend getting everything documented properly before you even attempt repo. The "breach of peace" standard varies significantly by jurisdiction - what's considered peaceful in one state might not be in another. Also, make sure your loan agreement explicitly reserves your right to enter the premises for repossession. Without that contractual right, you're limited to public areas or places where you have permission. One thing I learned the hard way is to photograph the equipment thoroughly before and after repossession to document its condition. This protects you if the debtor later claims you damaged it during the process.

Had a nightmare situation where our insurance verification was wrong - we thought borrower had adequate coverage but there was a gap in the policy dates. When equipment was stolen during the gap, we were stuck. Now I use Certana.ai to double-check all insurance docs against our security agreements. Catches date gaps, coverage amount mismatches, incorrect loss payee designations. Worth it for the peace of mind alone.

Thanks everyone - this is super helpful. Sounds like our requirements are probably reasonable (we require replacement value coverage, A-rated carrier, loss payee naming us as secured party). The borrower's attorney is likely just trying to reduce their client's costs. I'll review our security agreement language to make sure we're covered contractually, not just relying on Article 9. The document verification idea is smart too - we've had issues with inconsistent naming between UCC filings and insurance docs before.

This is such a timely discussion for me! I just finished paying off my SBA 7(a) loan ($320K) about 2 weeks ago and received what the bank called a "loan satisfaction document." Like several others here, I can see the original UCC-1 filing is still active in my state's Secretary of State database. What's really helpful about this thread is seeing the range of experiences - from automatic terminations to people waiting months or even years. I'm definitely going to be proactive about this rather than just waiting and hoping it gets handled automatically. The advice about calling the commercial loan servicing department specifically (not general customer service) seems like the key insight. I'm also going to check my original loan documents tonight to see if there's any language requiring a written termination request, since that could explain why some lenders seem to wait for borrower action. One question for those who've been through this - is there any advantage to sending a written request for the UCC termination via certified mail in addition to calling, just to create a paper trail from day one? I'm trying to be strategic about this since I'm likely going to need financing again within the next 6-12 months.

This whole thread has been incredibly valuable! I'm actually a newcomer to the SBA loan world - just got approved for my first 7(a) loan and we're closing next month. Reading through everyone's experiences with UCC terminations is giving me a heads up on what to expect down the road when we eventually pay it off. It sounds like the key lessons are: 1) Don't assume terminations happen automatically, 2) Know exactly who to call at your bank (commercial loan servicing/UCC filing department), 3) Document everything with email follow-ups, 4) Mention any business urgency around future financing needs, and 5) Be prepared to escalate to the SBA district office if needed. One thing I'm wondering - would it make sense to ask about the bank's UCC termination process upfront during loan closing? That way I'd know their specific procedures and timelines from the beginning rather than having to figure it out later when I'm under pressure for new financing. Thanks to everyone who shared their experiences - this is exactly the kind of real-world insight you can't get from the official loan documents!

I'll add my perspective as someone who's dealt with this situation recently. Yes, your promissory note can absolutely function as a security agreement - I actually prefer this approach because it streamlines the documentation and reduces the chance of inconsistencies between separate documents. The language you described sounds sufficient, but I'd recommend having someone review it to ensure the granting language is crystal clear. One thing I learned the hard way is to make sure your collateral description is broad enough to cover future acquisitions if that's your intent - "all equipment now owned or hereafter acquired" can be much more protective than just "all equipment." Also, since you mentioned the collateral is located at a specific address, consider whether you want to limit it geographically or expand it to cover assets wherever located. The UCC doesn't require a specific location, so you have flexibility there depending on your risk tolerance and the borrower's business model.

As someone who's been doing secured transactions for about 5 years, I can confirm that promissory notes absolutely can serve as security agreements when they contain the right elements. The key is making sure your language is bulletproof - I always look for explicit granting language like "debtor grants lender a security interest in" rather than passive language like "secured by." Your collateral description sounds adequate, but given the great advice from Emma and others about future acquisitions and multiple locations, you might want to consider broadening it to "all equipment, inventory, and accounts receivable, now owned or hereafter acquired, wherever located" to give yourself maximum protection. I've found that being overly broad in the security agreement rarely causes issues, but being too narrow can definitely come back to bite you later. Also, since several people mentioned Certana.ai for document review, I can vouch for it - used it on a complex equipment financing deal last month and it caught some subtle language issues that could have been problematic. Worth the small cost for peace of mind, especially on larger deals.