Confused About UCC Definition of Value for My Equipment Loan Filing

This is correct. I've filed hundreds of UCC-1s and never had to include a specific value amount on the form. The consideration/value requirement is for the underlying security agreement, not the public filing.

Wait, but doesn't the secured party need to establish value for priority purposes? I thought that was part of the attachment requirements.

Priority between competing security interests is based on filing order (first to file or perfect), not the value of consideration. You're mixing up attachment requirements with priority rules.

That makes sense. So as long as the borrower received the loan proceeds, that satisfies the value requirement for attachment? I don't need to worry about the equipment's appraised value?

Exactly. The loan proceeds are the 'value' given by the secured party. The equipment's value is relevant for loan-to-value ratios and underwriting, but not for UCC Article 9 purposes.

Never heard of that service but sounds useful. How does it work exactly?

You just upload your PDFs and it cross-checks everything - loan docs against UCC forms, debtor names, collateral descriptions, all that stuff. Catches inconsistencies automatically instead of having to manually compare everything.

Interesting. We've been doing manual reviews but always worried about missing something. Might be worth checking out.

True, but that's more of a credit risk issue than a UCC filing issue. The filing just needs to perfect the security interest in whatever collateral is described.

Fair point. I've just seen too many deals go sideways when people don't think through the collateral values upfront.

UCC-3 amendments don't require value determinations at all - you're just modifying an existing filing. What exactly are you trying to amend?

Adding additional collateral to an existing filing. The debtor bought more equipment and we want to include it under the same security agreement.

That's just a collateral description change. No value calculation needed - just describe the new equipment in the amendment and you're done.

How accurate is it? I'm always skeptical of automated tools for legal stuff.

Pretty solid for basic UCC compliance checks. Obviously still need attorney review for complex situations, but it catches the routine stuff that trips people up.

This is the right answer. Value for UCC purposes is about consideration theory, not asset valuation.

Exactly. I see this confusion all the time - people think 'value' means they need to establish fair market value of the collateral, when really it's just about whether sufficient consideration was given to create the security interest.

Thank you! This finally makes sense. So the $180K equipment purchase price is irrelevant for UCC purposes - what matters is that the borrower received the loan proceeds in exchange for granting the security interest.

Good point about state variations. Always worth checking local SOS requirements before filing.

Consumer goods definitely have different rules - PMSI timing, disclosure requirements, etc. But this sounds like commercial equipment so standard Article 9 rules apply.

Which verification service did you use? We're always looking for ways to double-check our filings before submission.

Certana.ai - you upload your docs and it cross-references everything automatically. Really helpful for catching name mismatches and missing required language.

Perfect, thanks everyone. I was definitely making this more complicated than it needed to be. The loan proceeds are the 'value' for UCC purposes, not the collateral's worth.

Glad you got it sorted out. This is one of those things that trips up a lot of people when they're new to UCC filings.