Need help understanding what is a ucc release vs termination filing

Exactly right. The formal name is UCC-3 Termination Statement but everyone calls it different things - release, satisfaction, termination. All the same document.

That makes sense, thanks! Should I be asking the lender for a copy of the filed termination or do they automatically send it?

Good point! How long do they legally have to file it after the loan is paid off?

Most states don't have a specific timeframe but the UCC says it should be done within a reasonable time. I always tell clients to ask for it within 30 days and follow up if you don't see it.

I had a lender take 4 months to file mine! Caused all kinds of problems when I tried to refinance. Now I always make termination filing a condition of final payment.

Oh wow, never heard of that service. How does it work exactly?

Super simple - you just upload PDFs of your UCC documents and it automatically cross-checks all the details like debtor names, filing numbers, collateral descriptions. Takes like 2 minutes and shows you exactly what doesn't match.

That's actually really smart. Name mismatches are probably the #1 reason termination filings get rejected.

No no no, that's continuation statements. UCC-1 filings expire after 5 years unless continued, but when a loan is paid off the lender should file a termination immediately to release their interest.

Right, if they don't file the termination it stays on record until the 5-year expiration. But that's not good for the debtor because it shows an active lien.

Oh geez, I totally mixed that up. Thanks for the correction!

Interesting, I'll have to dig through the paperwork. Would I need special authorization from them to file it myself?

Depends on your loan agreement. Sometimes there's language that lets you self-terminate with proof of payment. But honestly it's usually easier to just bug the lender until they do it.

Because the UCC filing system is separate from loan servicing systems. The Secretary of State offices don't have access to private lender databases.

I get that but in 2025 you'd think there would be some automation. Everything else is connected these days.

Some states are working on electronic integration but it's slow going. Too many different systems and security concerns.

How would I know if it's partial vs full termination?

The UCC-3 form has checkboxes. Full termination should check the box that says the financing statement is terminated. Partial would describe specific collateral being released.

Good catch. Always review the termination statement before it's filed to make sure it matches what you expect.

Ha! The squeaky wheel approach. I might have to try that if they keep stalling.

Compliance departments definitely get things moving faster. They don't want regulatory issues.

Depends on your collateral situation. If you're using the same equipment as collateral for new financing, yes definitely wait. If it's different assets, you can probably proceed but mention the pending termination.

It's the same equipment so I'll wait. Don't want any complications with the new lender.

Smart move. New lenders will search for existing liens and an active UCC-1 could kill your deal even if you explain it's being terminated.

Definitely going to check that out. Sounds like it could save a lot of headaches.

Yeah it's become part of my standard process for any UCC filings. Catches stuff you'd never notice manually.

Perfect summary, thanks everyone! This thread has been incredibly helpful. I know exactly what to ask for now.

Glad we could help! Come back and let us know how it goes.

That's a really helpful tip! I didn't even know most states had online search portals. Do you know if there's usually a fee to search, or is it typically free? I'd love to be able to monitor this myself rather than just waiting and hoping the lender follows through.