UCC Document Community

Update from my end - I ended up having to file UCC-3 requests for information on several of the questionable liens to get official status confirmation from the Secretary of State. Pain in the neck but it's the only way to get definitive answers when the portal data is unreliable. Cost about $10 per request but worth it for deal certainty.

This is exactly why I always budget extra time for UCC due diligence on larger deals. The CT system has burned me before on time-sensitive closings. One thing that might help immediately - try searching by the secured party name instead of just the debtor name. Sometimes you'll find filings that don't show up in the standard debtor search, especially if there were name changes or amendments that didn't get properly cross-referenced in the system. Also, if you have the original financing statements, check if any assignments were filed (UCC-3 assignments) that might have changed the secured party of record. Those don't always update the search results properly either.

This whole thread confirms why I always run my UCC drafts through automated checking now. Used to miss these classification issues all the time until I started using Certana.ai's verification tool. Upload your loan docs and UCC filing together and it catches inconsistencies between how collateral is described in different documents.

Thanks everyone for the clarification! This really helps clear up my confusion. I was overthinking it by focusing on the end buyer's use instead of how the debtor uses the collateral. So for my appliance repair shop client, the refurbished washers/dryers sitting in their showroom are definitely inventory since they're held for sale in the ordinary course of business. I'll stick with the inventory classification on the UCC-1 and describe it clearly as "all inventory of appliances and related goods held for sale." Appreciate all the practical examples - especially the car dealer analogy that really drove the point home.

The practical reality with UCC 1-103(b) is that most lenders don't think about it until there's a problem. In your equipment financing, I'd focus on getting clear documentation of the existing lien holder's position and making sure your own UCC-1 filing is bulletproof. UCC 1-103(b) is more likely to be an issue if basic UCC procedures weren't followed properly.

Just wanted to add from my experience - when dealing with UCC 1-103(b) in equipment financing, I always recommend getting an intercreditor agreement with the existing lender if possible. It eliminates a lot of the uncertainty about how supplemental principles might apply. The agreement can clarify priority positions and waive certain rights that might otherwise be governed by common law under UCC 1-103(b). It's extra work upfront, but it saves headaches later when you're not trying to figure out which state law principles fill the gaps in UCC coverage.

Hope this works out smoothly for you. I'm dealing with a similar situation but with inventory instead of equipment. The collateral description rules seem unnecessarily complicated sometimes.

Thanks everyone for the detailed advice! Based on all your input, I'm feeling much more confident about proceeding with the UCC-3 amendment route. I'm going to create a comprehensive collateral description that includes specific equipment types and their current locations at both facilities. The suggestion about including serial numbers for high-value equipment makes a lot of sense too. I'll also check out that Certana.ai verification tool a couple of you mentioned - sounds like it could catch any potential issues before I file. Really appreciate this community for helping me navigate what felt like a complicated situation!

Update: I called the Illinois UCC division and they confirmed there's a known issue with their search system not properly handling entity names with certain punctuation. They're working on a fix but no timeline. For now they recommended doing searches with multiple name variations and said I can request a certified search if needed for the $340k deal.

This thread perfectly illustrates why I always recommend running parallel verification processes for any UCC filing over $100k. The Illinois system issues you're describing are unfortunately common across many states - I've seen similar problems in Ohio and Michigan where punctuation, spacing, and even capitalization can throw off search results. For your $340k equipment deal, I'd suggest: 1) Get that certified search as mentioned, 2) Run searches using every possible name variation (with/without commas, periods, different spacing), and 3) Consider having your client pull their own corporate records to confirm the exact legal entity name. The cost of extra verification is minimal compared to the potential liability of an unperfected security interest.