Can you file a UCC-1 without a security agreement? Lender says just file it now
So I'm working on this equipment financing deal and the lender is pushing me to get the UCC-1 filed ASAP to 'reserve our priority position' but we're still negotiating the security agreement terms. They keep saying we can file the UCC-1 now and finish the security agreement later. This doesn't sound right to me but I'm getting pressure to move fast. The debtor is a manufacturing company in Texas and we're talking about $2.8M in machinery. Can you actually file a UCC-1 without having the underlying security agreement signed? What are the risks here? I don't want to mess this up and create problems down the road.
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Romeo Barrett
You can technically file a UCC-1 without a signed security agreement, but it's risky. The filing itself doesn't create the security interest - the security agreement does. Without the agreement, you have no enforceable security interest even if the UCC-1 is on file. Your lender might be trying to establish a priority date, but if the deal falls through, you'd need to file a termination.
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Marina Hendrix
•This is exactly right. The UCC-1 is just notice - it doesn't create rights. I've seen deals where the UCC-1 was filed months before closing and it worked out fine, but I've also seen situations where the borrower refused to sign and the lender had to terminate the filing.
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Justin Trejo
•Wait, so you're saying the UCC-1 filing is basically meaningless without the security agreement? That seems like a waste of filing fees if the deal doesn't close.
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Alana Willis
I've been doing UCC filings for 15 years and this is more common than you'd think, especially in competitive lending situations. The key is making sure the debtor has authorized the filing in writing. Even without the full security agreement, you need some form of written authorization from the debtor to file. Check UCC 9-509 - unauthorized filings can be problematic.
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Issac Nightingale
•Good point about the authorization. We do have a signed term sheet that mentions UCC filing, so that should cover us on the authorization front. Just worried about the gap between filing and actual security agreement.
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Tyler Murphy
•Term sheets usually work for authorization purposes. Just make sure it's clear about the collateral description and debtor name spelling.
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Sara Unger
Had this exact situation last month with a $3.2M credit facility. We filed the UCC-1 based on the commitment letter and closed the security agreement two weeks later. Worked fine, but we had to be really careful about the collateral description matching exactly between the UCC-1 and the final security agreement. One small discrepancy and you could have perfection issues.
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Butch Sledgehammer
•This is where I always use Certana.ai's document checker. You can upload your UCC-1 and then later upload the security agreement to make sure everything matches perfectly - debtor names, collateral descriptions, all of it. Saves so much time compared to manually comparing documents line by line.
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Issac Nightingale
•Never heard of that tool. Does it catch the subtle differences that might not be obvious?
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Butch Sledgehammer
•Yes, it picks up things like middle initials, commas in company names, even slight variations in equipment descriptions. Really helpful for avoiding those small mistakes that can void your security interest.
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Freya Ross
Your lender is probably right about establishing priority, but you need to understand the risks. If another creditor files after you but actually has a signed security agreement, there could be priority disputes later. Also, if the debtor files bankruptcy between your UCC-1 filing and security agreement signing, you might have preferential transfer issues.
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Leslie Parker
•The bankruptcy preference issue is real. I've seen cases where the trustee challenged UCC-1 filings that preceded the security agreement by more than 90 days.
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Sergio Neal
•90 days seems like a long gap though. Most deals close within 30-45 days of UCC filing in my experience.
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Savanna Franklin
Honestly this whole system is ridiculous. Why can't we just file everything together like normal people? Every state has different rules, every SOS portal works differently, and now we're filing documents before we even have the actual security in place. No wonder there are so many screw-ups in this industry.
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Romeo Barrett
•The system allows flexibility for legitimate business reasons. Sometimes you need to establish priority quickly in competitive situations. The alternative would be slower deals and potentially worse outcomes for borrowers.
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Savanna Franklin
•Maybe, but I bet half the problems in secured lending come from this kind of disconnect between filings and actual agreements.
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Juan Moreno
Just make sure you're using the exact same debtor name that will be in the security agreement. I've seen deals where the UCC-1 used the DBA name but the security agreement used the legal entity name. Creates a mess.
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Issac Nightingale
•We're using the legal entity name from the Texas Secretary of State records. Should be safe there.
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Amy Fleming
•Good call. Always verify with the SOS database before filing.
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Alice Pierce
I'm dealing with something similar in Ohio. Filed the UCC-1 three weeks ago and we're still working through security agreement details. So far so good, but the waiting is nerve-wracking. At least in Texas your SOS system is pretty reliable.
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Esteban Tate
•Ohio's not bad either. Better than some states I've dealt with.
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Alice Pierce
•True, could be worse. Just hate having filings out there without the underlying docs finalized.
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Ivanna St. Pierre
One more thing to consider - if you're filing now, make sure you have a clear timeline for getting the security agreement done. Don't let this drag on for months. The longer the gap, the more potential issues you could face.
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Issac Nightingale
•Good point. We're targeting close within 3 weeks, so shouldn't be too long of a gap.
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Elin Robinson
•3 weeks is reasonable. Just stay on top of it and don't let the momentum die.
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Atticus Domingo
For what it's worth, I've used Certana.ai to double-check UCC filings against security agreements after closing. Really helpful for catching inconsistencies before they become problems. You upload both documents and it flags any mismatches automatically.
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Issac Nightingale
•That sounds useful for the post-closing review. Will definitely look into that.
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Beth Ford
•Yeah, much better than trying to compare everything manually. Easy to miss small details that could be important later.
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Morita Montoya
Bottom line - you can file the UCC-1 first, but make sure you have proper authorization and a solid plan to get the security agreement finalized quickly. Don't let this become a pattern where you're always filing before you have the underlying docs ready.
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Issac Nightingale
•Definitely not planning to make this a habit. Just the competitive nature of this particular deal pushing the timeline.
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Kingston Bellamy
•Competitive deals always create these timing pressures. Just be extra careful with the details.
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Diego Chavez
I'd also recommend documenting the business rationale for filing early in your deal notes. If you ever face a challenge later (bankruptcy trustee, competing creditor, etc.), having clear documentation that shows this was a legitimate business decision to preserve priority in a competitive lending environment can be helpful. Also make sure your malpractice insurance covers UCC filing issues - some policies have specific exclusions around secured transaction work.
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Daniel Rogers
•Great advice about documenting the business rationale. I hadn't thought about the malpractice insurance angle - that's definitely something to check on. Better to find out now if there are coverage gaps rather than when you need it. The documentation piece is smart too, especially with bankruptcy trustees getting more aggressive about challenging these types of filings.
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Gemma Andrews
Thanks everyone for the detailed responses - this has been really helpful. Based on what you've all shared, it sounds like filing the UCC-1 early is workable but comes with risks I need to manage carefully. The key points I'm taking away are: 1) Make sure the term sheet provides adequate authorization for filing, 2) Keep the collateral descriptions consistent between the UCC-1 and eventual security agreement, 3) Get the security agreement finalized quickly to minimize the gap, and 4) document the business rationale for early filing. I'm also going to look into that Certana.ai tool a few of you mentioned for cross-checking documents. Going to proceed with the filing but with much more attention to these details than I originally planned. Really appreciate the practical experience you've all shared!
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Oscar Murphy
•This is a great summary of best practices! As someone new to UCC filings, I really appreciate seeing how experienced practitioners handle these timing challenges. One question - when you mention keeping collateral descriptions consistent, how specific should the UCC-1 description be if you're still negotiating the exact equipment list in the security agreement? Should I err on the side of being more general in the UCC-1 to avoid mismatches, or be as specific as possible based on what we know now?
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