UCC Document Community

Thanks everyone - this has been incredibly helpful. Sounds like the consensus is to proceed with the equipment lender filing their own UCC-1 with specific collateral description, rely on the subordination agreement for priority, and not expect the SBA to amend their original filing. I'm going to double-check all our documents for consistency issues before filing to avoid any rejections with this tight timeline.

I'm new to UCC subordination deals but this thread has been incredibly educational. One question I haven't seen addressed - what happens if the equipment gets damaged or destroyed while both liens are in place? Does the subordination agreement typically address insurance proceeds and how they're distributed between the SBA and equipment lender? I'm working on a similar deal and want to make sure we're covering all the bases in our documentation.

Bottom line for your CNC situation: primary use = manufacturing = equipment classification. The occasional sales don't change that fundamental relationship. List as equipment and you're good to go.

Great discussion on the primary use test! One thing to add - when documenting your rationale for equipment classification, consider including a brief description in your security agreement about how the CNC machines are "used or bought for use primarily in business operations" rather than "held for sale or lease." This language mirrors the UCC definitions and can help support your classification decision if it's ever questioned. Also, for mixed-use assets like yours, some attorneys recommend including a clause that covers "all replacements, substitutions, and proceeds" to catch any scenario where equipment might temporarily shift categories.

This has been such a valuable thread to follow as someone relatively new to secured lending! I've learned so much from everyone's practical experiences. One thing I'm curious about - for those of you who regularly use promissory notes as security agreements, do you have any standard language or clauses that you always include to make sure the security interest creation is ironclad? I'm thinking about developing a template approach based on all the great advice shared here, particularly the "grants a security interest" language and the "now owned or hereafter acquired, wherever located" collateral descriptions. Also, has anyone had experience with how courts actually interpret these combination documents when there are disputes? The theoretical UCC requirements are clear, but I'd love to hear about real-world enforcement if anyone has war stories to share.

This discussion has been incredibly thorough and helpful! As someone who handles UCC filings regularly, I can confirm everything that's been said about promissory notes serving as security agreements. One additional tip I'd offer based on my experience: when you're using a promissory note as both instruments, consider adding a clause that explicitly states "This promissory note constitutes a security agreement under the Uniform Commercial Code." While not legally required, this belt-and-suspenders approach removes any possible ambiguity about your intent and makes it crystal clear to anyone reviewing the document later (including judges, opposing counsel, or bankruptcy trustees) that you intended to create both a debt obligation AND a security interest. I've found this simple addition can prevent disputes before they start. Also, regarding the Certana.ai tool that's been mentioned - I tried it recently on a multi-state equipment deal and was impressed with how it flagged potential issues with choice of law clauses and attachment requirements that I might have missed in manual review. For the cost, it's definitely worth using as a final check before executing important secured transactions.

UPDATE: Just called Maine Secretary of State to confirm. Current fees are exactly what someone posted earlier - $25 for UCC-1, $20 for amendments, $25 for continuations. Rep was very helpful and confirmed these rates are current as of January 2025.

Thanks everyone for the helpful responses! Based on the confirmed information from Cynthia's call to Maine SOS, I'll budget $25 for this UCC-1 filing. Really appreciate the community knowledge here - it's so much better than trying to navigate outdated fee schedules online. Will make sure to double-check the debtor name against their database before submitting too. This forum is invaluable for getting real-world filing experience from practitioners who deal with this stuff regularly.

I've been through something similar with a business credit card UCC filing. One thing that really helped me was getting a UCC search report from the state to see the complete filing history - sometimes there are amendments or corrections that aren't obvious from the basic database search. Also, if you're under time pressure for the refinancing, consider asking your new lender if they'd accept a title insurance policy that covers the UCC lien risk while you're disputing it. Some lenders will close with that protection in place rather than waiting for a full resolution.

The title insurance approach is really smart - I hadn't considered that option. From my experience dealing with UCC complications during refinancing, the insurance typically runs about 0.5-1% of the loan amount depending on the risk profile and lender requirements. It's usually much cheaper than the carrying costs of delaying your refinancing for months while fighting the UCC. Just make sure the title company is willing to insure against UCC defects specifically - not all policies cover filing irregularities or invalid security interests. You'll want to get quotes from a few different underwriters since their risk tolerance varies significantly on these issues.