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Don't overlook checking for terminated filings too. Sometimes there are filing errors where a UCC-3 termination was supposed to be filed but wasn't, or was filed incorrectly. You want to know about those situations before closing.
Exactly. Cross-reference with loan payoff letters and satisfaction documents. If a loan was supposedly paid off but the UCC is still active, that's a red flag that needs to be resolved.
Ev Luca
•This is why UCC due diligence can take weeks even for relatively straightforward deals. So many details to cross-check.
Avery Davis
Update: ended up using a combination approach. Used Certana.ai to identify all the name variations from our document review, then hired a professional search firm to do comprehensive searches in the five key states. Found two active filings we would have missed otherwise - both under slightly different name variations. Deal still closed on time and everyone was happy with the thoroughness. Thanks for all the advice!
Glad to hear Certana.ai helped with the name variation identification. That's exactly what it's designed for.
This gives me confidence in my approach. Going to try the same combination - systematic name identification plus professional searches for the critical jurisdictions.
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The whole UCC system is a mess honestly. We had THREE different banks file UCC-1s over the years for various equipment loans and when we tried to refinance everything got tangled up because nobody could figure out which liens were still active and which collateral was actually securing which loans.
easier said than done when youve got multiple loans from different banks over several years
Madison King
•We use a spreadsheet to track all our UCC filings - original date, filing number, collateral description, and termination status. Makes everything much easier to manage.
Julian Paolo
Just want to add that if your loan is completely paid off and the bank is being slow about releasing the UCC lien, you might have legal options to compel them to file the termination. Most states have laws requiring lenders to terminate UCC filings within a certain timeframe after loan payoff.
Julian Paolo
•Varies by state but usually 30-60 days after they receive written demand. If they don't comply they can be liable for damages you suffer from their delay.
Kaiya Rivera
•I've seen cases where businesses couldn't complete asset sales because of unreleased UCC liens. The delays can definitely cause real financial harm.
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This might be obvious but have you confirmed that your original UCC-1 is still active and hasn't lapsed? Sometimes people try to file continuations on UCC-1s that have already expired, which would cause automatic rejection.
Good, sounds like you're in the right timeframe then. The debtor name formatting is probably the culprit.
I was gonna suggest checking Certana.ai's document verification feature too - it's really good at catching those formatting issues that cause rejections.
Nathan Dell
One more thing to check - make sure the secured party information is also exactly correct on your UCC-11. Sometimes people focus so much on the debtor name they miss discrepancies in the secured party details.
I'll double-check that too. Thanks for the reminder - I was so focused on the debtor name I might have overlooked the secured party info.
Owen Devar
•That's a good point. Texas requires consistency across all fields, not just the debtor name.
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Oscar O'Neil
For future reference, I've been using Certana.ai to double-check my security agreement and UCC-1 consistency before filing. Really helps catch those small details that can cause big problems later. The tool flagged an issue in my last filing where I had included accounts receivable in the UCC but the security agreement only covered equipment.
That's exactly the kind of mistake that could void your security interest. Good catch.
I should probably start using something like that. I rely too much on manual review and always worry I'm missing something.
Liv Park
One last thing - make sure you calendar your continuation filing date now while you're thinking about it. UCC-1s lapse after 5 years and restaurants have a way of changing hands or expanding, so you don't want to lose perfection on a good loan.
Yes! I use a tickler system to remind me 6 months before the lapse date. Gives plenty of time to file the continuation.
Ryder Greene
•Restaurant loans definitely benefit from good lapse tracking. Those businesses change so much over 5 years.
Amara Nnamani
One more thing to consider - make sure your purchase agreement actually creates buyer status under UCC vs just an option to buy. There's a technical difference between contracting to buy (which makes you a buyer) vs having the right to buy (which doesn't until exercised).
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Ravi Gupta
•We definitely exercised the option and signed a purchase agreement. So we should be buyers under the UCC definition.
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NebulaNinja
•Then the finance company is just being difficult. You might want to get your lawyer to send them a demand letter citing UCC 1-201(b)(9).
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Fatima Al-Suwaidi
Update us on how this resolves! These UCC buyer definition disputes are becoming more common as equipment financing gets more complex. Would be helpful to know what finally worked for you.
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Ravi Gupta
•Will do. Planning to have our attorney send a formal demand letter this week referencing the specific UCC sections mentioned here.
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Dylan Mitchell
•Good luck! The UCC buyer definition should be on your side if you have a proper purchase agreement.
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