Confused about what products are included in the UCC definition of goods for collateral schedule

The UCC defines goods pretty broadly in Section 2-105. It's basically all things movable at the time the security interest attaches, except for money, documents, instruments, accounts, chattel paper, general intangibles, and oil/gas/minerals before extraction. Your raw materials, work-in-process, and finished inventory all qualify as goods. Equipment parts would too if they're not yet installed.

I ran into this same issue last month! The key thing to remember is goods vs equipment vs fixtures. Goods are typically inventory-type items, while equipment is more permanent business assets. Your raw materials and finished products are definitely goods. The equipment parts might be equipment depending on their intended use.

Be careful with work-in-process though. Depending on your state, there might be specific requirements for describing inventory at different stages of completion. Some jurisdictions want more detail than just 'work-in-process goods.

Ugh this stuff is so confusing! I filed a UCC-1 last week and the SOS rejected it because my collateral description was 'too vague.' Now I'm paranoid about being too specific vs too general. How do you find the right balance?

For manufacturing clients, I typically include: raw materials, work-in-process, finished goods, packaging materials, supplies, and spare parts. Covers most of what they'd have on hand. The $2.8M facility you mentioned sounds substantial enough to warrant being comprehensive.

One thing that helped me was creating a checklist of what NOT to include as goods. Documents, accounts receivable, patents, trademarks, deposit accounts - basically anything intangible. Once you eliminate those, most everything else physical is fair game as goods.

Just remember that goods can become fixtures if they're attached to real property in a certain way. If your client has items that might be considered fixtures, you may need a separate fixture filing.

For what it's worth, I've never had an issue using broad goods language like 'all inventory, raw materials, work-in-process, finished goods, and supplies.' The UCC is pretty forgiving as long as you're reasonably descriptive.

Pro tip: if you're unsure about any specific items, call the Secretary of State's office. Most states have UCC staff who can give guidance on collateral descriptions. They'd rather help you get it right than process rejection paperwork.

Bottom line: your raw materials, work-in-process, finished products, and equipment parts all sound like textbook goods under the UCC. Just make sure your collateral description is comprehensive enough to cover everything the lender wants secured. With a facility that size, precision matters.

One additional consideration for manufacturing clients - don't forget about returnable containers, pallets, and packaging materials that might cycle through your inventory. These are often overlooked but can represent significant value and should be included in your goods description if the client wants them secured. Also, for work-in-process items, I've found it helpful to specifically mention "goods in various stages of completion" rather than just "work-in-process" - some filing offices prefer the more descriptive language.