Can you sell an asset with a UCC lien - equipment buyer backing out

You absolutely can sell assets with UCC liens - happens all the time in commercial transactions. The key is proper coordination at closing. Your title company or closing attorney should handle the lien payoff as part of the sale proceeds distribution. The UCC-1 doesn't prevent the sale, it just needs to be addressed in the purchase agreement.

Your buyer's attorney is being overly cautious or doesn't handle equipment finance deals often. Standard practice is to structure the closing so lien payoff comes directly from sale proceeds. You'll need a payoff letter from your lender showing exact amount due as of closing date, then the closing agent distributes funds accordingly - lender gets paid, UCC gets terminated, you get the balance.

Been doing equipment sales for 15+ years. This is routine stuff. The UCC lien travels with the equipment until it's satisfied, but that doesn't prevent sale. Your closing documents should include: 1) Payoff letter from current lien holder, 2) Instructions for fund distribution, 3) UCC-3 termination to be filed post-closing, 4) Clear title transfer to buyer. If the buyer's attorney doesn't understand this basic commercial transaction structure, maybe they need to consult with someone who handles secured transactions regularly.

OMG YES you can sell with liens! I was in almost identical situation 6 months ago - had $240K in equipment with $160K still owed. Buyer initially freaked about the UCC filing too. Here's what we did: Got a 10-day payoff letter from the finance company, structured closing through a commercial title company, and they handled everything. Finance company got paid directly from closing proceeds, filed the UCC-3 termination within a week, buyer got clear title, I got my equity. Smooth as butter once we got the right people involved.

Your buyer's attorney is wrong and creating unnecessary obstacles. UCC liens don't prevent sales - they're just secured interests that need to be satisfied. This is like saying you can't sell a house with a mortgage. The mortgage gets paid off at closing from sale proceeds, same concept applies to UCC liens on equipment. You need a more experienced closing agent who understands secured transactions.

This is making me nervous about my own upcoming equipment sale. I have two UCC-1 filings on different pieces of equipment from different lenders. Both pieces are being sold as a package deal. Do I need separate payoff letters for each lien? And what if one lender is faster than the other with the UCC-3 termination?

Update: talked to my lender this morning and they confirmed what everyone here is saying. They handle lien payoffs from sale proceeds all the time. Getting a payoff letter today and forwarding to the closing attorney. Buyer's counsel still seems hesitant but at least now I have ammunition to push back. Thanks for the reality check everyone - was starting to think I was crazy!

Just want to add - make sure your purchase agreement specifically states that all liens will be satisfied from closing proceeds and that clear title will be delivered. Also include penalties if the seller doesn't provide UCC-3 terminations within specified timeframe. Protects both parties.

Been lurking here for months but had to chime in - went through almost identical situation last fall. $400K crane sale with $220K lien balance. Buyer's bank initially balked at the UCC filing but once we showed them the standard closing structure with lien payoff, they were fine. Sometimes it's not the attorneys, it's the lenders who don't understand commercial equipment transactions.

Final update - closed successfully yesterday! Lender payoff went smoothly, UCC-3 termination was filed same day (apparently they have an automated system now), and buyer got clear title. Total process took 12 days once we got the right closing agent involved. Buyer's original attorney ended up referring us to someone with more equipment finance experience, which made all the difference. Thanks again everyone for the guidance and reality check!

Congrats on getting this resolved! This is such a valuable thread for anyone dealing with UCC liens on equipment sales. I'm bookmarking this for future reference. It really highlights how important it is to work with professionals who understand secured transactions - sounds like finding that experienced closing agent made all the difference. The fact that your lender had an automated UCC-3 termination system is impressive too. Thanks for sharing the full journey from problem to solution!

This entire thread has been incredibly educational! As someone who's just starting to work with equipment financing, I had no idea that UCC liens were so commonly handled through closing proceeds. The real-world examples everyone shared really demystified what seemed like a complex legal issue. It's concerning how many attorneys apparently don't understand basic UCC Article 9 principles - makes you wonder what other "standard" commercial practices they might get wrong. The mortgage analogy was particularly helpful for understanding the concept. Definitely going to keep this thread handy for future reference, and it sounds like finding the right closing agent who specializes in secured transactions is absolutely critical. Thanks to everyone who shared their experiences and congratulations to those who got their deals closed successfully!

This has been such an enlightening discussion! As someone relatively new to equipment financing, I had no idea how standard these UCC lien payoffs through closing proceeds actually are. The comparison to mortgage payoffs at real estate closings really made it click for me. What's most striking is how many legal professionals seem unfamiliar with basic UCC Article 9 procedures - it makes me wonder how many deals get unnecessarily complicated or even killed because of this knowledge gap. I'm definitely going to use this thread as a reference guide and make sure any attorneys I work with have solid experience in secured transactions. Really appreciate everyone sharing their real-world experiences and outcomes - it's invaluable learning for those of us still figuring out the commercial equipment space!

This thread is absolutely gold for anyone dealing with equipment financing! As someone who's still learning the ropes in this space, I had no clue that UCC lien payoffs at closing were so standard. The mortgage comparison really drove the point home - it's such a perfect analogy. What's honestly shocking is how many attorneys seem to lack basic knowledge of UCC Article 9. Makes me think we should all be asking very specific questions about secured transaction experience before engaging legal counsel. I'm bookmarking this entire discussion - the real-world examples and step-by-step breakdowns are incredibly valuable. Thanks to everyone who shared their experiences, especially those who followed up with their outcomes. This is exactly the kind of practical knowledge you can't get from textbooks!

What an incredible educational journey this thread has been! As someone just getting started in commercial equipment transactions, I had absolutely no idea that UCC lien payoffs through closing proceeds were not only possible but completely routine. The mortgage payoff analogy was brilliant - it instantly made the whole process click for me. What's genuinely concerning is learning how many attorneys apparently lack basic UCC Article 9 knowledge. This thread has definitely taught me to ask very specific questions about secured transaction experience before hiring legal counsel for any equipment deals. The step-by-step breakdown of the closing process, the importance of payoff letters with per diem calculations, and the UCC-3 termination procedures - this is exactly the kind of practical knowledge that's impossible to find in textbooks. I'm saving this entire discussion as my reference guide. Thanks to everyone who shared their real experiences, especially those who followed up with successful outcomes. This community is invaluable for learning how these transactions actually work in the real world!

This entire discussion has been incredibly enlightening for someone new to equipment financing like myself! I had no idea that UCC lien payoffs through closing proceeds were not only standard practice but essentially how most secured equipment transactions work. The mortgage analogy really made everything click - of course you can sell equipment with liens, just like you can sell real estate with mortgages. What's genuinely troubling is discovering how many attorneys seem unfamiliar with basic UCC Article 9 principles. This thread has taught me that I need to specifically vet legal counsel's secured transaction experience rather than just assuming they understand commercial equipment deals. The practical details everyone shared - payoff letters with per diem calculations, fund distribution instructions, UCC-3 termination timing, proper closing coordination - this is the real-world knowledge you can't get from textbooks. I'm definitely bookmarking this entire thread as my reference guide for future equipment transactions. Thanks to everyone who shared their experiences, especially those who provided updates on successful closings. This community is invaluable for understanding how these deals actually work in practice!

This thread has been absolutely invaluable as someone just entering the equipment financing space! I had no clue that UCC lien payoffs through closing proceeds were standard practice - I always assumed liens had to be cleared before any sale could happen. The mortgage analogy really drove it home for me. What's most eye-opening is seeing how many attorneys apparently don't grasp basic UCC Article 9 concepts. This discussion has definitely taught me to ask very specific questions about secured transaction experience when vetting legal counsel for equipment deals. The step-by-step breakdown of payoff letters, closing coordination, and UCC-3 termination procedures is exactly the kind of practical knowledge you can't find in textbooks. I'm saving this entire thread as my go-to reference guide. Thanks to everyone for sharing their real-world experiences and congratulations to those who successfully closed their deals!