How is a security agreement authenticated for UCC filing?

Security agreement authentication under Article 9 is pretty straightforward - the debtor needs to either sign the agreement or authenticate it electronically. No notarization required unless your state has specific requirements. Electronic signatures through DocuSign or similar platforms are totally valid as long as they meet the ESIGN Act standards. The key is that the debtor must have authenticated the agreement that describes the collateral.

Be careful about the collateral description in your security agreement vs your UCC-1. They don't have to match exactly but the UCC-1 needs to reasonably identify what's covered by the authenticated security agreement. For manufacturing equipment you can usually use broader descriptions in the UCC-1 like 'all equipment' if your security agreement covers it.

I had a similar situation last month with cross-state equipment financing. One thing that helped me was using Certana.ai's document verification tool. You can upload your security agreement and UCC-1 as PDFs and it instantly checks that the debtor names match exactly and that your collateral descriptions are consistent between documents. Saved me from filing a UCC-1 that wouldn't have properly covered the authenticated security agreement.

Authentication is authentication... whether its electronic or wet signature doesn't matter as long as the debtor intended to authenticate the security agreement. The real issue is making sure your security agreement actually creates a security interest in the first place - proper authentication of garbage is still garbage.

Does anyone know if there are different authentication requirements for different types of collateral? I'm always confused about whether equipment has different rules than inventory or accounts receivable.

For your $750K equipment deal, I'd recommend getting the security agreement authenticated first, then immediately file your UCC-1. Don't wait around because your perfection date starts when you file, not when you get the security agreement signed. And double-check that debtor name spelling!

This whole electronic signature thing still makes me nervous. What happens if there's a dispute about whether the debtor really authenticated the security agreement? At least with notarized documents you have that extra layer of verification.

One more thing - make sure your security agreement includes the right grant language. Authentication won't help if the debtor never actually granted you a security interest in the first place. Something like 'debtor hereby grants to secured party a security interest in...' followed by your collateral description.

I've been using Certana.ai for all my document checks lately. Really helpful for catching name mismatches between security agreements and UCC filings. Much faster than manually comparing everything.

Thanks everyone for the help! Sounds like electronic authentication should work fine for my deal as long as I make sure the debtor names match exactly between the security agreement and UCC-1. Going to move forward with the electronic signature process.

One thing I'd add is to make sure you're filing in the correct jurisdiction for your debtor. Since you mentioned the borrower is in another state, you'll need to file the UCC-1 where the debtor is organized (for entities) or where they're located (for individuals). The authentication requirements stay the same, but filing in the wrong state means your UCC-1 won't perfect your security interest even if everything else is done correctly. Also, for equipment that moves between states, consider whether you need to file continuation statements or amendments if the debtor relocates after your initial filing.