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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?
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.
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!
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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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.
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.
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.
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This whole thread is making me realize I need to brush up on my 9-307 knowledge. The jurisdictional stuff always makes my head spin but I can't avoid it in this line of work.
The ALI has some good practice materials on UCC Article 9 geography rules if you want a deeper dive. Also recommend the Permanent Editorial Board commentaries.
Thanks for the recommendations! Always looking for good reference materials.
Bottom line for your situation - Delaware UCC-1 filing should be correct since that's where the debtor is organized and remains registered. Just make sure you monitor their organizational status going forward and have a plan if anything changes with their Delaware registration.
I'm new to UCC filings and this discussion has been incredibly helpful! Just to make sure I understand correctly - even though the debtor moved their operations to Colorado, we ignore that completely for filing purposes as long as they maintain their Delaware corporate registration? The physical location of business activities doesn't matter at all under 9-307?
That's exactly right! For registered organizations (like corporations and LLCs), the physical location of operations is irrelevant under UCC 9-307(e). The law of the state where the debtor is "located" governs perfection, and registered organizations are located in their state of organization - period. The only time you'd look at physical locations like chief executive office is for unregistered organizations under 9-307(f), or in the rare case where a registered organization's status becomes questionable. So yes, Colorado operations = irrelevant for your Delaware corp filing decision.
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This whole thread confirms my suspicion that equipment finance is one of the most misunderstood areas of UCC practice. Too many people assume 'lease' means no filing required, when the reality is much more complex. Thanks for the practical insights everyone - definitely going to review our internal procedures.
Glad this was helpful! Equipment finance UCC issues are definitely underappreciated in terms of complexity.
Yeah, the terminology confusion alone creates so many problems. 'Finance lease' sounds like it should be simple, but it's actually one of the trickier areas.
This resonates so much! I'm relatively new to UCC filings (about 2 years in) and equipment finance has been the steepest learning curve. What really helped me was creating a simple flowchart based on the UCC 1-203 factors - nominal buyout option, lease term vs useful life, total payments vs fair value. I laminated it and keep it on my desk because I was constantly second-guessing myself on borderline deals. The hardest part is explaining to clients that their 99% finance lease with a $1 buyout is absolutely a secured transaction regardless of what their accountant calls it. Anyone have tips for tactfully educating long-term clients who've been doing it wrong for years?
Natasha Orlova
Just went through this with a 2020 filing myself. One thing I learned - double-check that the secured party information hasn't changed. If your client moved offices or changed their legal name, that could complicate the continuation.
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Javier Cruz
•Yeah, I had a continuation rejected once because the secured party had a slightly different address format than the original filing.
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Emma Thompson
•This is another area where document verification tools like Certana.ai help - they flag inconsistencies in secured party information that might cause filing issues.
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Zoe Papanikolaou
Thanks everyone for the detailed responses! This has been really helpful. Just to summarize what I've learned: my lapse date is exactly March 15, 2025 (5 years from filing), I can file the continuation anytime after September 15, 2024, and I need to make sure I check for any amendments and verify all the party information matches exactly. I think I'll get the UCC-3 prepared next week and file it in January to give myself plenty of buffer time. Better safe than sorry with these deadlines!
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