UCC Document Community

For your $2.8M manufacturing facility, you'll want to be comprehensive but precise. Based on what you've described, your main categories should be: (1) Equipment - all machinery, tools, vehicles, computer hardware, furniture; (2) Inventory - raw materials, work-in-progress, finished goods; (3) Accounts - all accounts receivable, payment intangibles; (4) General intangibles - IP, software licenses, customer lists, goodwill, contract rights; (5) Deposit accounts - all bank accounts; (6) Investment property if applicable. Don't forget to add "and all proceeds and products thereof" to each category. Given the loan size, I'd strongly recommend having an experienced UCC attorney review your collateral descriptions before filing - the cost of getting it wrong far exceeds the review fee.

As someone new to UCC filings, this thread has been incredibly educational! I'm working on my first major secured transaction and was getting overwhelmed by all the different asset categories. The systematic breakdown from @Ava Williams really clarifies things - I had no idea about the distinction between chattel paper and general intangibles, or that investment property needs control agreements beyond just the UCC-1 filing. One thing I'm still confused about: if a manufacturing company has both raw materials AND finished goods, do those get listed as separate line items in the collateral description, or can you just say "all inventory" and have it cover both? Also seeing multiple mentions of Certana.ai's document checker - is that something most firms are using now for UCC verification?

Bottom line for your CNC situation: primary use = manufacturing = equipment classification. The occasional sales don't change that fundamental relationship. List as equipment and you're good to go.

Great discussion on the primary use test! One thing to add - when documenting your rationale for equipment classification, consider including a brief description in your security agreement about how the CNC machines are "used or bought for use primarily in business operations" rather than "held for sale or lease." This language mirrors the UCC definitions and can help support your classification decision if it's ever questioned. Also, for mixed-use assets like yours, some attorneys recommend including a clause that covers "all replacements, substitutions, and proceeds" to catch any scenario where equipment might temporarily shift categories.

I'm working on a similar equipment financing deal right now. These UCC 1-308 formerly 1-207 questions come up a lot but honestly they're a distraction from the real issues. Focus on debtor name accuracy, proper collateral description, and timely filing. That's what actually protects your security interest.

Hassan, you're absolutely right to be cautious about this. I've been dealing with UCC filings for over 15 years and can confirm what everyone else is saying - UCC 1-308 (formerly 1-207) has no place on UCC-1 financing statements. That provision is about preserving rights when you're compelled to perform under a contract, which isn't what's happening when you file a UCC-1. You're simply giving public notice of your security interest. Adding that language could confuse the filing office or even lead to rejection. For your $350k equipment loan, stick to the basics: exact legal name of the debtor (check their articles of incorporation), clear collateral description like "equipment and inventory," and make sure you file timely to preserve any purchase money security interest priority. Your lien perfection depends on these fundamentals, not on reservation of rights clauses that don't apply to this type of filing.

The bottom line is that your NCCS UCC statement needs to support your lender's security interest in the current equipment configuration. If there are gaps, fix them now before closing. Whether that's through documentation, amendments, or supplemental agreements depends on your specific situation. Get your attorney involved if you're unsure about the best approach.

I've been following this discussion and wanted to add something that might help - when dealing with NCCS UCC statement documentation, don't forget to check if your state has specific formatting requirements or standardized forms. Some states are very particular about how equipment specifications need to be described in the NCCS documentation, especially for manufacturing equipment like yours. Also, since you mentioned the $850K value, make sure your insurance documentation aligns with your NCCS UCC statement - lenders often cross-reference these during their review process. The last thing you want is a discrepancy between your filed collateral description and your insurance schedules that creates questions about coverage gaps.

Bottom line: get your collateral description fixed with specific equipment categories, ignore the UCC 1-308/1-103 stuff for filing purposes, and file your continuation early. You'll be fine.

As a newcomer to UCC filings, this thread has been incredibly helpful! I'm dealing with a similar situation where I'm trying to perfect a security interest in restaurant equipment worth about $400K. Reading through all these responses, it's clear I need to focus on Article 9 requirements rather than getting distracted by general UCC provisions. The advice about being specific with collateral descriptions makes total sense - I was planning to use broad language but now I'll list "commercial kitchen equipment including ovens, refrigeration units, prep tables" etc. Also definitely going to check out that Certana.ai verification tool before filing. Better to catch errors early than deal with rejections later!