MCA UCC leads - tracking down existing liens before advancing funds

Good point about name variations. We had a case where the original UCC-1 was filed as 'ABC Services LLC' but our merchant was operating as 'ABC Service, LLC' (no 's' on Service). The search didn't catch it initially because of that one letter difference.

Yeah debtor name matching is huge. The UCC search logic can be really strict about exact matches depending on the state filing system.

We weren't doing personal searches consistently but that's a really good point. How do you handle situations where the guarantor has multiple businesses? Do you search all their entities?

I usually search the guarantor's SSN and any businesses they own 20% or more of. It's more work but better to find liens upfront than get surprised later.

Interesting - how does the document verification work exactly? Do you upload PDFs of the UCC search results?

Yeah you upload the formation documents and UCC search reports as PDFs and it automatically flags any potential conflicts or name mismatches. Saved me from advancing on a deal last month where there was an existing SBA lien I almost missed.

That sounds useful for MCA underwriting. Does it check for broad collateral descriptions that might conflict with your security interest?

Exactly! And some of these asset-based lenders have cross-default clauses too. So even if your merchant is current on the equipment loan, if they default on your MCA, it could trigger the other lender's remedies.

This is why I always read the actual UCC filings, not just the search summary. The collateral description details matter so much for determining priority.

Good call on fixtures. Restaurant equipment, manufacturing machinery, even some POS systems can be considered fixtures depending on how they're installed.

How do you search for fixture filings? Is that a separate search in the real estate records?

Usually fixture filings are in the real estate records at the county level, not with the Secretary of State where regular UCCs are filed.

That's a great point about timing the lapse dates. Some lenders forget to file continuations, especially smaller regional banks or credit unions.

How do you track the continuation deadlines? Do you set calendar reminders to recheck the filings?

I keep a spreadsheet of all the UCCs on my active deals with the original filing dates and continuation deadlines. Check them quarterly.

Do you use a specific UCC search service or just search the Secretary of State websites directly?

We use a commercial search service for the initial searches but always verify critical filings by checking the SOS site directly. Sometimes the search services miss recent filings.

How do you find out about all the guarantor's other businesses? Do you ask them to disclose or search public records?

We require disclosure in our application but also search corporate records to verify. People forget about inactive entities or ownership changes.

Good point but getting loan agreements from competing lenders is pretty tough. Most merchants won't share them and the lenders definitely won't.

True, but you can at least ask the merchant for copies. Sometimes they'll provide them to speed up funding.

How accurate is the automated checking? Do you still review everything manually or trust the software results?

I still review everything but it catches a lot of stuff I would have missed. Especially helpful for DBA variations and collateral description overlaps.

Smart approach. UCC due diligence seems like overhead until you get burned on a deal. Then it becomes the most important part of underwriting.

The learning curve is steep but this kind of discussion really helps. Wish I'd found this forum before making some expensive mistakes.