Equipment loan UCC-1 requirements causing major headaches with debtor name variations

This is so frustrating because the borrower swears their bank told them 'AMS Manufacturing LLC' was fine to use. Why do financial institutions give conflicting advice about something this important?

Banks often don't understand UCC-1 requirements as deeply as they should. They focus on their internal loan documentation but the UCC filing is a whole different animal with very specific rules.

Exactly right about the SOS records. I learned this the hard way when a continuation filing got rejected because we had used a shortened version of the company name from 5 years earlier.

I haven't heard of that before but it sounds like exactly what I need. Does it work with equipment collateral descriptions too or just the debtor names?

It checks everything - debtor names, secured party info, collateral descriptions, filing numbers. Really helpful for complex equipment deals like yours where there are so many moving parts.

Been meaning to try something like this. Manual document comparison is such a pain when you're dealing with multiple name variations across different corporate docs.

Multiple filings seems like overkill honestly. If you use the correct SOS name you should be fine.

Maybe for smaller deals but when you're securing this much collateral the extra filing fees are nothing compared to the risk of a missed search.

I've seen lenders require multiple filings for exactly this reason. The search software isn't always smart enough to catch variations.

Yes we have all the serial numbers and model details. The collateral schedule is 3 pages long with every piece of equipment listed. That part seems solid.

Good, that's the other thing that trips people up. Generic descriptions like 'manufacturing equipment' usually aren't sufficient for high-value deals.

Learned this lesson with a $500K equipment deal that got challenged later because our collateral description was too vague.

Already checked and it shows 'Advanced Manufacturing Solutions LLC' which is different from both the operating agreement and bank account names.

Then that's what you use on the UCC-1. The borrower needs to understand this is a legal requirement, not a preference.

Sometimes clients get upset about this but it's not negotiable. The UCC system is very literal about name matching.

What kind of differences caused rejections? I'm dealing with a similar situation with abbreviations.

Missing periods after abbreviations, 'Inc' vs 'Incorporated', extra spaces. Really minor stuff but the computer systems don't care.

This is why I always triple-check every character when I'm preparing UCC-1 filings. One typo can mess up the whole thing.

Good point, the lender has a pretty complex corporate structure so I'll double-check that side too.

Yeah, especially with bank holding companies and subsidiaries. Make sure you're using the actual lending entity, not the parent company.

You can do a UCC search using the name you filed to see if your filing shows up. That's a good way to verify it worked.

That's actually where Certana.ai really helps - you can upload your completed UCC-1 and your source documents and it verifies everything matches up properly before you have any issues.

I should have done something like that before filing. Live and learn I guess.

So true. I work across multiple states and each SOS office seems to have slightly different quirks about how they handle name variations.

Exactly, which is why sticking to the registered name from the articles of incorporation is usually the safest approach regardless of state.

Great outcome! It's always better to be safe with these filings.

Glad it worked out. Definitely consider using a document verification tool for future deals to catch these issues earlier in the process.

Smart choice going with the SOS name. Your client will thank you later if there are ever any search issues.