Confused about difference between UCC-1 and UCC-3 forms - help needed

This is the simplest way to think about it. UCC-1 = new lien, UCC-3 = modify existing lien.

But what if you mess up the original UCC-1? Do you file a UCC-3 amendment right away or start over?

OK so I don't actually file these myself - that makes more sense. The lender mentioned reviewing filings so I think they want me to double-check the collateral descriptions match our equipment list.

Exactly! Always verify the collateral description is accurate. I've seen loans get messed up because the UCC-1 said 'office equipment' but the actual collateral was manufacturing machinery.

Wait, can a lender file a UCC-3 amendment without telling the debtor? I thought there had to be some notification process.

That sounds useful - did it catch anything significant in your case?

Yeah it found that my business name on the UCC-1 didn't exactly match what was in my articles of incorporation. Small difference but could have voided the security interest. Fixed it with a UCC-3 amendment before it became an issue.

Name mismatches are huge problems. The courts are really strict about debtor name accuracy on UCC filings.

The continuation thing is important - UCC-1 filings expire after 5 years unless you file a UCC-3 continuation. Lots of lenders mess this up.

I thought it was 7 years? Or is that something else?

No it's definitely 5 years for most states. You have to file the continuation within 6 months before the expiration date.

This is why I always double-check filings against the Secretary of State records. One comma out of place and your UCC-1 might not perfect your security interest.

Our state's filing system is so buggy though. Half the time the search function doesn't work right.

I feel you. The learning curve is steep but it's important stuff. A security interest is basically the lender's legal claim to your collateral if you don't pay.

The terminology is definitely intimidating at first but once you understand the basics it starts making sense.

There are some good resources online that explain UCC concepts in simpler terms. Don't feel bad about not knowing this stuff - most business owners don't deal with it regularly.

How would you even know if someone filed a termination? Do you get notified automatically?

Not usually. You have to monitor the filings yourself or have your attorney do periodic lien searches. Most people don't find out until they try to get new financing.

This is another reason to use something like Certana.ai's document checker. You can verify your filings are still active and consistent with your loan docs.

Perfect, that's exactly what I needed to know. I'll pull up our equipment list and compare it to whatever UCC-1 they filed. Thanks everyone for the help!

Good luck with your call. Don't be afraid to ask questions if something doesn't look right.

What kind of problems did you run into? Just delays or something more serious?

The bank had to redo a bunch of paperwork and it delayed our additional funding by almost a month. Cost us a business opportunity we were trying to finance.

That's frustrating. Shows how important it is to get the details right upfront.

How long should you wait before following up on a termination filing?

I usually give them 30 days after payoff then start asking. The filing itself only takes a few minutes online so there's no reason for long delays.

Some states have laws requiring lenders to file terminations within a certain timeframe after payoff. Check your state's requirements.

True, and if they don't comply you might be entitled to damages. Though most lenders are pretty good about this if you stay on top of them.