UCC Document Community

Don't forget about the practical aspects of UCC 1-305 compliance. Each state has different fees, processing times, and customer service quality. Plan accordingly and budget for potential complications.

This is a great discussion on UCC 1-305 multi-state strategy. One thing I'd add is to consider the timing of when you perfect your security interest in each jurisdiction. Since you're dealing with equipment that could potentially move between facilities, you want to ensure there's no gap in perfection coverage. I've seen situations where equipment was relocated between states during the financing period, and the lender had to scramble to file additional UCC-1s to maintain priority. Also, don't forget to coordinate with your title insurance company if you're getting coverage - they'll want to review your filing strategy to ensure it aligns with their underwriting requirements.

This thread has been super helpful - thanks everyone for the detailed responses! I'm getting a much clearer picture now. Sounds like the consensus is: 1) Use title lien perfection, not UCC-1 filing for vehicles, 2) Get a solid security agreement with proper default/insurance language, 3) File the title lien within 30 days in Ohio, and 4) Make sure all documents have consistent vehicle descriptions. I'm going to check out that Ohio State Bar form that Demi mentioned and probably run everything through one of those document verification tools before submitting to BMV. Really appreciate everyone taking the time to share their experiences - family deals can definitely get complicated if not done right!

As someone new to private party vehicle financing, this discussion has been incredibly educational! I'm curious about one aspect that hasn't been covered much - what happens if the borrower wants to trade in or sell the vehicle before the loan is paid off? Do you need specific language in the security agreement about substitute collateral or how the payoff process works? Also, for those who mentioned using document verification tools like Certana.ai, is there a cost involved or are there free alternatives that work just as well for checking document consistency?

Three months is way too long, especially for an $85k payoff. Most equipment finance companies have automated systems that should flag paid loans for UCC termination within days. The fact that they're dragging their feet suggests either poor internal processes or they're hoping you'll just forget about it. I'd recommend checking your original loan agreement for the specific termination timeline - many contracts actually specify shorter deadlines than state law requires. Also worth pulling a fresh UCC search to confirm there haven't been any partial releases or amendments filed that might not be showing up in your initial search. Don't let them sit on this - unterminated liens can definitely complicate future financing decisions.

Had a similar situation with a regional bank that sat on our UCC-3 termination for almost 6 months after we paid off a $120k equipment loan. What finally got their attention was when I sent a formal demand letter citing the specific state statute and mentioning potential liability for damages if their delay impacted our credit profile. Within two weeks of that letter, the termination was filed. The key was making it clear I understood the legal requirements and wasn't going away quietly. Also discovered that many lenders have dedicated UCC departments separate from regular loan servicing - sometimes you need to bypass the frontline reps who have no idea what you're talking about and get directly to the people who actually handle these filings.

One last tip - if you ever need to verify that your UCC filings are accurate and consistent with your other business documents, tools like Certana.ai can upload and cross-check everything automatically. Saves time compared to manual document review, especially if you have multiple lenders or complex collateral arrangements.

Thanks for asking this question! I was in the same boat a few months ago. One thing that helped me understand it better is thinking of the UCC-1 as similar to a car loan - the lender has a lien on your car until you pay it off, and the same concept applies to your business equipment. The filing just makes that lien official and public. When you meet with your lender next week, you can ask them to show you exactly what will be listed as collateral and confirm they have your business name spelled exactly as it appears on your state registration. Most lenders are pretty good about explaining the process once they know you're interested in understanding it.

Unfortunately, your client learned an expensive lesson about the importance of proper documentation. Article 9 is pretty unforgiving when it comes to the basic requirements. No written agreement + no possession = no security interest. It's that simple for equipment collateral.

I feel for your client, but everyone here is absolutely right - without a written security agreement, there's no enforceable security interest in equipment that can't be possessed. I've had to deliver this same bad news to clients before, and it's never easy. The UCC 9-203 requirements are ironclad: you need either possession/control OR a written agreement signed by the debtor. Since we're talking about manufacturing equipment the debtor obviously needs to keep using, possession isn't an option. My advice is to be direct with them about their position as an unsecured creditor, but also explore whether the debtor might be willing to enter into a proper security agreement now to secure the existing debt. At least then they'd have protection going forward, even if they can't fix the 2019 issue.