UCC Document Community

Bottom line - make sure your liquidated damages clause serves a legitimate business purpose and isn't just trying to scare the debtor into compliance. Courts can smell penalty clauses from a mile away.

Thanks for all the detailed responses everyone! This is really helpful. Based on what I'm reading, it sounds like the key is ensuring our liquidated damages amount is genuinely compensatory rather than punitive. For our $850K equipment deal, I'm thinking we should calculate based on actual projected costs like remarketing expenses, storage, administrative overhead, and expected depreciation during the disposition process. Would it make sense to cap it at something like 15-20% of the original loan amount, or should we focus more on documenting our cost projections regardless of percentage? Also planning to use that Certana.ai tool a few of you mentioned to verify consistency between our security agreement and UCC-1 filing.

I'm dealing with a similar issue right now with my Tesla solar loan through a different lender. The frustrating part is that these solar companies often use third-party financing partners who aren't familiar with proper UCC filing procedures. What I learned is that you should also check if your original UCC-1 has any amendments filed against it - sometimes there are UCC-5 correction statements that change the debtor information, and the termination needs to reference the most recent version. Also, since you mentioned your refi rate lock expires next week, you might want to ask your title company if they'd accept a letter of commitment from Mosaic stating they will correct and refile the UCC-3 within a specific timeframe. Some title companies will work with you on tight deadlines if you can show good faith efforts to resolve the issue.

I just went through this exact nightmare with my SunPower financing last month! The name discrepancy is absolutely what's causing your UCC-3 termination to bounce back - I had the same issue where the original filing showed "Robert J. Thompson" but the payoff docs had "Robert Thompson" without the middle initial. What finally worked for me was getting a certified copy of the original UCC-1 from the Secretary of State office (cost $15 in my state) and then emailing that directly to the financing company's UCC compliance department along with a written request to refile using the EXACT debtor name format. Also, ask them to provide you with the rejection notice from the state - it'll confirm the specific reason for the bounce-back. Since your rate lock expires next week, I'd also suggest calling your title company to see if they'll accept a commitment letter from Mosaic guaranteeing the corrected filing within 72 hours. Some underwriters will work with you on time-sensitive deals if you can show documented progress toward resolution.

Just to add one more perspective - if this is SBA financing, they have specific requirements about UCC filings that might influence your decision. SBA typically requires UCC-1 filings for all personal property collateral regardless of how it might be classified by state law. Worth checking if SBA is involved in your deal.

This is a great discussion - I'm dealing with something similar on a manufacturing deal right now. One thing I'd add is to consider the priority implications too. UCC-1 filings generally give you priority from the filing date, while fixture filings can sometimes relate back to construction financing if there's a fixture filing on record. Also, don't forget about purchase money security interests - if any of this equipment was recently acquired with financing, you might have PMSI priority that affects your filing strategy. The key is making sure your security agreement clearly identifies which collateral is being treated as fixtures versus personal property so there's no ambiguity later.

Quick follow-up question - does anyone know if experimental aircraft follow the same UCC rules? I have a client with a kit-built plane that doesn't have standard registration.

Great discussion here! I've handled several aircraft UCC filings and want to emphasize the importance of getting both the collateral description AND the debtor name exactly right. For a $285K Cessna deal, I'd recommend: 1) Use the exact N-number from the FAA registry, 2) Include make, model, year, and aircraft serial number, 3) Triple-check the LLC name matches state records exactly (including punctuation), 4) Don't forget the parallel FAA security interest filing in Oklahoma City, and 5) Set up your continuation reminder system immediately. The dual filing requirement trips up a lot of people - you need both UCC perfection AND FAA registration to be fully protected. Also consider doing a comprehensive UCC search first to identify any existing liens that need to be satisfied or subordinated.

Update us when you get the certified copy! Always curious how smooth these processes actually are in practice vs what the state websites promise.

Just went through this exact same process last month in Delaware! The online portal is actually really user-friendly once you find it. One tip - when you're entering the filing number, make sure you include any leading zeros if they're shown on your printout. The system can be picky about the exact format. Also, if you're ordering multiple certified copies (which might be smart if you have other lenders or need extras for your files), there's usually a bulk discount. Took about 4 business days to get mine delivered via regular mail.