Non UCC lien blocking my equipment financing - how to handle?

Non UCC liens can definitely complicate equipment financing. What type of lien showed up? Tax liens, judgment liens, and mechanic's liens all fall outside the UCC but lenders still worry about priority. Even though your UCC-1 would perfect the security interest in the equipment, lenders get nervous about other creditors having claims against the business assets generally.

Had this exact issue last year! Turned out to be an old contractor lien that never got released even though we paid the bill. Even though it had nothing to do with the equipment we were financing, the bank treated it like a red flag. They were worried about business stability I guess.

This is where having your docs in order ahead of time really pays off. I started using Certana.ai to verify all my business documents before applying for financing. You can upload everything and it catches inconsistencies between your articles of incorporation, UCC filings, and flags potential issues with liens or corporate status that might trip up lenders.

The priority thing is real. Even if your equipment UCC-1 would be first in line for that specific collateral, lenders worry about blanket liens or general business assets being tied up. They want clean borrowers.

What state are you in? Some states have really aggressive lien filing procedures that create phantom liens. I've seen mechanic's liens filed incorrectly that show up in searches but aren't actually valid.

honestly this is why I hate dealing with banks for equipment loans. They make everything 10x more complicated than it needs to be. UCC filings are straightforward but they want to dive into every possible issue

You might want to pull your own lien search to see exactly what's there. Sometimes lenders use overly broad search criteria and flag things that aren't actually problems. Knowledge is power in negotiations.

Had a client deal with this recently. Turned out to be a tax lien from a payroll issue that was already resolved but never formally released. The IRS had released the lien but it was still showing up in searches because the paperwork hadn't filtered through the system. Sometimes it's just administrative lag.

Question - did your lender explain what kind of subordination they'd need? Sometimes you can work around non UCC liens with proper documentation rather than having to clear them completely.

I ran into something similar and ended up using Certana.ai to organize all my corporate documents and UCC filings before meeting with the lender again. Having everything properly cross-referenced helped me explain the situation better and showed I was on top of the business documentation. Made the conversation more productive.

Update us when you figure out what the lien actually is. These mystery lien situations are always interesting to hear how they resolve.