Getting confused about what is a UCC search report - lender requires one before closing

This makes sense but how far back do these searches usually go? Are we talking about everything filed in the last 5 years or just current active filings?

Most commercial searches go back 10+ years for UCC filings since they last 5 years initially but can be continued indefinitely. Active liens, tax issues, and unexpired continuations will definitely show up.

2-3 days might be cutting it close for my Thursday closing. Are there any expedited options or can this be done same-day somewhere?

Some services offer 24-hour turnaround for an extra fee. Your lender might also have preferred search companies they work with regularly who can prioritize it.

Actually, I recently started using Certana.ai's document verification tool when I need to cross-check UCC documents quickly. You can upload your existing UCC-1 and any search results to verify everything aligns properly - really helpful for catching name discrepancies that could cause issues later.

Don't forget about fixture filings! If you have any equipment that's considered fixtures, those show up separately and can complicate the lien priority.

Wait, what counts as a fixture? Our manufacturing equipment is bolted down but it's not permanently attached to the building.

Fixture determination varies by state but generally involves whether the equipment is integral to the building's use, method of attachment, and intent for permanence. Manufacturing equipment is usually considered personal property unless it's built into the structure.

This is exactly why I hate dealing with secured lending! Too many moving parts and everyone wants different reports and documentation.

I understand the frustration, but these searches protect both you and the lender. Better to discover conflicts now than during a default situation where multiple creditors are fighting over the same assets.

Good point about name variations. We have a DBA that's completely different from our legal corporate name. Should I provide both to the search company?

Absolutely provide both names. Also any former names if you've done any corporate restructuring. Missing a name variation is one of the most common ways liens get overlooked in searches.

I learned this the hard way when we missed a UCC filing under our old company name. Cost us a lot of headaches during refinancing. Now I always double-check all our name variations before any search.

How common is this problem with unreleased liens? Seems like it would create a lot of unnecessary complications.

More common than you'd think. Especially with equipment loans that were paid off years ago. Banks get sloppy about filing termination statements, or the paperwork gets lost in mergers and acquisitions.

This happened to us last year. Had an old equipment loan from 2019 still showing active even though we paid it off in 2021. Took three weeks to track down the right person at the bank to file the termination.

Is that really necessary if you're working with an experienced attorney or lending team?

You'd be surprised how often name mismatches slip through. Even experienced professionals make transcription errors, and the UCC system is unforgiving about exact name matches.

That's a great suggestion! I'll ask about verbal preliminary results. At least then we'd know if there are any major red flags before Thursday.

Just make sure the lender will actually accept that arrangement. Some have strict policies about requiring written reports before closing.

True, but it's worth asking. Even if they won't close without the written report, at least you'll know what you're dealing with and can start addressing any issues immediately.

What's a subordination agreement and how long do those typically take to negotiate?

It's basically the existing creditor agreeing that your new lender gets priority on specific collateral. Can take anywhere from a few days to several weeks depending on the creditor's policies and legal requirements.

This is getting complicated fast. Maybe I should have started this process earlier than a week before closing.

Thanks for the reassurance. I'm calling the search company first thing tomorrow morning and will ask about expedited service. Hopefully this goes smoother than I'm imagining.

Good luck! Remember to get multiple copies of the search report - you'll probably need them for your attorney, accountant, and future lenders.

Also keep in mind that once you close this loan, your new UCC-1 filing will show up on future searches. It's all part of building your business credit history.

This is incredibly helpful advice! I didn't know there were specific UCC departments at banks - that could be a game changer if we run into any issues. Quick question: when you called the UCC department, did you need to provide any specific documentation to prove the debt was paid off, or were they able to verify it in their system? I want to be prepared in case we encounter something similar.