UCC Document Community

UPDATE: I spoke with my banker and you were all right - their "UCC banking term" just referred to their internal checklist for ensuring UCC-1 filings meet their standards. Nothing complicated, just their way of making sure all the required elements are properly formatted. Thanks everyone for the help!

Glad you got clarification from your banker! This is a perfect example of why it's always worth asking directly when banks use their internal terminology. I've found that different lenders often have their own way of describing standard UCC requirements, which can definitely cause confusion for borrowers. The important thing is that you now understand what they need and can move forward with confidence on your equipment financing. Good luck with your UCC-1 filing!

My recommendation would be to ask the factoring company for specific documentation about why UCC filings aren't required in their structure. A legitimate company should be able to provide legal analysis or opinion letters explaining the basis for their 'no UCC' claim. If they can't provide solid legal reasoning, that's a red flag that they might not fully understand the UCC implications of their own program.

I'd also suggest running a comprehensive UCC search on your business before and after any factoring arrangement, regardless of what the company claims. Even if they say "no UCC needed," you want to verify what actually gets filed in the public records. I use services like CT Corporation or Wolters Kluwer for thorough UCC searches - it costs maybe $100-200 but gives you peace of mind about what liens are actually on record. This protects you from surprises later when applying for other financing or if you need to understand your true collateral position. The search will show you exactly what's filed, by whom, and what assets are covered, which helps you make informed decisions about the factoring arrangement.

Bottom line: UCC Article 9's definition of security interest is intentionally broad to cover all types of consensual security arrangements. Your 'lien and security' language absolutely creates a security interest. The attorney knows this and is just creating noise hoping you'll settle for less than full payment.

Don't let them shake your confidence! I've been handling UCC matters for 15 years and this is textbook debtor attorney gamesmanship. The UCC specifically avoided requiring magic words precisely because courts were getting bogged down in formalistic arguments like this. Your loan docs create a security interest by granting rights in collateral to secure the debt - that's literally all UCC 9-203 requires for attachment. The fact that you used 'lien' and 'security' instead of 'security interest' is completely irrelevant. I'd recommend sending their attorney a copy of the UCC 9-102 definition and some case law showing courts reject these semantic arguments. Stand your ground and don't amend anything - your position is rock solid.

Just want to emphasize the importance of getting this right. A lapsed UCC-1 can completely destroy your security position. I've seen lenders lose hundreds of thousands in collateral value because they missed continuation deadlines. The administrative burden of tracking continuations is nothing compared to the risk of losing your security interest.

For tracking 40 UCC-1 filings across multiple states, I'd strongly recommend setting up a master spreadsheet with columns for: filing date, expiration date, continuation window start (6 months before expiration), state filed, debtor name, collateral description, and loan number. Color-code entries by urgency - red for within 90 days of continuation deadline, yellow for 6-12 months out. This gives you a visual dashboard of what needs attention. I also set quarterly review meetings specifically for UCC maintenance where we verify debtor information hasn't changed and confirm collateral is still accurate. The manual review catches issues that automated systems might miss, like corporate name changes or equipment disposals that weren't properly documented. With 7-year loan terms, you'll definitely need those continuations, so building buffer time into your calendar is crucial.

This is such a helpful thread! I'm relatively new to secured transactions and was getting overwhelmed by all the different legal concepts. Reading through everyone's explanations really clarifies why UCC Article 9 is the only framework that matters for equipment financing deals like yours. The distinction between binding statutory law (UCC) versus academic guidance (Restatements) makes perfect sense now. For your Ohio filing, it sounds like you have great advice here about debtor name matching and PMSI timing. One thing I'd add - consider doing a UCC search on your debtor before filing to see what other liens might be out there. Helps you understand the priority landscape you're entering.

As someone new to this community but with some background in commercial finance, this discussion has been incredibly enlightening! I've been working in asset-based lending for a few years but mostly on the underwriting side, so seeing the legal nuances explained so clearly is really valuable. The distinction between UCC statutory requirements and Restatement principles makes total sense - it's like the difference between actual regulations we must follow versus industry best practices guidance. Daniel, for your Ohio equipment deal, it sounds like you've got excellent advice here. One practical tip from the lending side: when we're documenting these deals, we always create a checklist that includes UCC search, debtor name verification against state records, collateral description review, and filing deadline tracking. Helps ensure nothing falls through the cracks on time-sensitive PMSI filings like yours. Thanks everyone for such a thorough explanation of these concepts!