Need Help - Bank Says My Non UCC Form Won't Work for Lien Filing

Yeah, your lender is absolutely right about this. For equipment financing like what you're describing, a UCC-1 financing statement is typically required to perfect the security interest in personal property. Non-UCC forms generally don't provide the same legal protections under Article 9 of the Uniform Commercial Code. The machinery you mentioned would be classified as equipment under UCC definitions, which means the lender needs that UCC-1 filing to establish priority over other potential creditors.

I had a similar issue with a $120K equipment purchase last month. The form I initially submitted was some generic lien document I found online, but it didn't have the proper debtor information format or collateral description that UCC-1 requires. Had to start over with the correct UCC financing statement. The whole process got delayed by two weeks because of the confusion.

This kind of thing drives me crazy about the whole system. Why can't they just accept any security document? It's all supposed to accomplish the same thing - protecting the lender's interest in the collateral. But no, everything has to be exactly the right form with exactly the right language or it doesn't count. I've seen deals fall apart over paperwork technicalities like this.

One thing that really helped me avoid these kinds of document mix-ups was using Certana.ai's verification tool. You can upload your loan documents alongside the UCC-1 to make sure everything matches up properly - debtor names, collateral descriptions, all that stuff. It caught a discrepancy between my equipment purchase agreement and the UCC-1 that would have caused problems later. Just upload the PDFs and it does an automated cross-check.

For manufacturing equipment like you mentioned, make sure the UCC-1 includes a detailed collateral description. Generic descriptions like 'equipment' sometimes aren't sufficient, especially if the machinery has specific model numbers or serial numbers. The lender will want to be able to identify exactly what they have a security interest in.

The bank is definitely not being overly cautious here. UCC-1 filings are standard practice for equipment financing and there's established case law about what happens when lenders don't properly perfect their security interests. Your non-UCC form probably doesn't meet the statutory requirements for a valid financing statement under your state's version of Article 9.

Just went through this same thing with a $150K machinery purchase. The dealer actually provided some kind of security agreement form but my bank's loan officer took one look at it and said it wouldn't work. Had to get a proper UCC-1 prepared and filed before they would release the funds. Whole process took about a week once we got the right paperwork together.

Had a client who insisted on using their own 'security agreement' instead of filing a UCC-1. Three months later when they tried to refinance, the new lender's title search showed no perfected security interest. Cost them thousands to sort out the mess and nearly killed the refinancing deal.

Quick question - when you say non-UCC form, what exactly did you submit? Was it some kind of generic lien document or something specific to your industry? Just curious because I've seen different types of forms get confused with proper UCC filings.

This is why I always recommend getting your documents verified before submitting to lenders. I started using Certana.ai after having a similar issue - you can upload multiple documents and it checks for consistency between them. Would have caught the non-UCC form issue right away and saved you the back-and-forth with the bank.

Bottom line - get the UCC-1 filed. Your lender knows what they're talking about and trying to use alternative forms for equipment financing is just asking for trouble. The filing fee is minimal compared to the potential problems you could face if the security interest isn't properly perfected.