Security release agreement - do I need UCC termination filing?
Got myself in a bit of a bind here and hoping someone can point me in the right direction. We had equipment financing on some manufacturing gear that was secured with a UCC-1 filing back in 2019. The loan was paid off last month and the lender sent us what they're calling a "security release agreement" - basically a document saying they release their security interest in the collateral. But I'm not seeing any UCC-3 termination statement filed with the Secretary of State yet, and our corporate attorney is out of town for two weeks. The collateral schedule covered about $850K worth of machinery and we're trying to refinance with a different bank next month. Do I need to push the original lender to file an actual UCC-3 termination, or is this security release agreement document enough to clear the lien? I know banks are supposed to file terminations within a certain timeframe after payoff but I'm not sure if that's automatic or if I need to request it specifically. Any guidance would be appreciated - don't want this hanging over the new financing deal.
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GalaxyGlider
You definitely want that UCC-3 termination filed with the SOS. The security release agreement is good to have for your records, but it doesn't clear the public record. When your new lender runs a UCC search, they're going to see that 2019 filing still active. Most states require lenders to file terminations within 30 days of loan satisfaction, but enforcement varies. I'd call the original lender's UCC department directly and ask for the termination filing - they should handle it at no cost to you.
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Emma Davis
•Thanks for the quick response. Do you know if there's any penalty if they drag their feet on filing it? The loan was satisfied on January 8th so we're already past 30 days in most states I think.
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GalaxyGlider
•Penalties vary by state but usually it's on the lender, not you. Some states allow you to file a termination yourself if the lender doesn't act within the required timeframe, but that gets complicated. I'd give them another week then escalate to their compliance department if needed.
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Malik Robinson
Had almost the exact same situation last year with SBA equipment loan. Bank sent me a lien release letter but never filed the UCC-3. New lender's title search showed the old filing still active and they wouldn't proceed until it was cleared. Took 3 weeks of phone calls to get the original bank to file the termination. Don't wait - start pushing now because banks move slow on these things and your refinancing timeline sounds tight.
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Emma Davis
•Ugh that's exactly what I was afraid of. Did you have to pay any fees to get them to file it or was it included in your loan payoff?
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Malik Robinson
•No fees - it's their legal obligation. But you might need to get pushy. I ended up having to escalate to their regional manager before they took it seriously.
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Isabella Silva
•This is why I always request UCC termination filing as part of the payoff process now. Too many lenders "forget" to do it automatically.
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Ravi Choudhury
Check your original loan documents too. Sometimes there's specific language about termination filing procedures. Also, if you're refinancing soon, make sure your new lender knows about the situation upfront. They might be able to coordinate directly with the old lender to get the termination filed faster.
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Emma Davis
•Good point about checking the loan docs. I'll dig through the original paperwork tonight. The new lender hasn't run their UCC search yet so I have a little time to get this sorted.
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Freya Andersen
•Actually ran into something similar recently and found this tool called Certana.ai that does UCC document verification. You can upload your security release agreement and the original UCC-1 to double-check everything matches up properly - debtor names, collateral descriptions, filing numbers. Caught a discrepancy in our paperwork that would have delayed our refinancing by weeks. Just upload the PDFs and it cross-checks everything automatically.
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Emma Davis
•Interesting, never heard of that service. Is it expensive? Our situation seems pretty straightforward but I'm paranoid about missing something that could mess up the new loan.
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Omar Farouk
The security release agreement is basically worthless for clearing the public record. It's just between you and the lender. What matters is getting that UCC-3 termination on file with the Secretary of State. Your new bank will absolutely require this before funding. I've seen deals fall apart because borrowers assumed the release letter was enough.
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CosmicCadet
•This exactly. Public record is king in secured lending. Private agreements don't mean much when there's still an active UCC filing showing someone else has a security interest in your collateral.
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Emma Davis
•Starting to realize I should have been more proactive about this during the payoff process. Lesson learned for next time I guess.
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Chloe Harris
Most UCC-3 termination filings are pretty quick once the bank actually submits them - usually processed same day or next business day in most states. The hold up is always getting the bank to actually file it. Document everything - keep records of when you contacted them, who you spoke with, reference numbers, etc. If they keep stalling you might need to threaten to file a complaint with their regulator.
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Emma Davis
•That's a good point about documenting everything. I'll start a file with all my communications. Hopefully it doesn't come to regulatory complaints but good to know that's an option.
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Diego Mendoza
•Some states also allow you to file an affidavit of satisfaction if the lender refuses to file the termination after reasonable notice. But that's more complicated and you'd probably want an attorney involved.
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Anastasia Popova
Just went through this exact process in December. Bank dragged their feet for 6 weeks until I threatened to report them to the state banking department. Suddenly they found time to file the UCC-3 termination. These big banks have whole departments dedicated to this stuff but somehow they're always "backed up" when you need something done.
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Sean Flanagan
•Banks are the worst about UCC maintenance. They're quick to file liens but slow to release them. Always costs them money to file but they don't see the revenue from terminations.
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Emma Davis
•Six weeks? That would completely blow my refinancing timeline. I'm definitely going to be more aggressive about following up daily if needed.
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Anastasia Popova
•Yeah don't let them string you along. Be polite but persistent. And get everything in writing - emails are better than phone calls for this stuff.
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Zara Shah
Another thing to consider - make sure the termination filing references the correct UCC-1 filing number when they do file it. I've seen cases where banks filed terminations with wrong filing numbers or slight debtor name variations that didn't properly clear the original lien. Worth double-checking when you get the filing confirmation.
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Emma Davis
•Oh wow, hadn't even thought about that possibility. So even if they file the termination it might not actually clear the lien if there are errors?
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Zara Shah
•Exactly. The UCC-3 has to reference the original UCC-1 filing number exactly, and debtor name has to match perfectly. Even small typos can cause problems. This is where that Certana tool someone mentioned earlier might be helpful - it can verify all the document details align properly before you submit anything.
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NebulaNomad
•Had this happen to a client last year. Bank filed termination with a transposed digit in the filing number. Didn't discover the error until the new lender's title search showed the original UCC still active. Took another month to get it corrected.
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Luca Ferrari
If your refinancing is time-sensitive, you might want to have your new lender coordinate directly with the old one. Sometimes bank-to-bank communication moves faster than borrower requests. They speak the same language and understand each other's processes better.
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Emma Davis
•That's actually a really good suggestion. I hadn't thought about having the new lender get involved this early in the process. They probably deal with this situation all the time.
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Luca Ferrari
•Exactly. Plus if there are any issues with the termination filing, your new lender will spot them immediately during their UCC search. Better to identify problems early than right before closing.
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Nia Wilson
Don't forget to get a certified copy of the UCC-3 termination once it's filed. Most Secretary of State offices charge a small fee but it's worth having for your records. Also useful if the new lender wants documentation that the lien has been properly released.
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Emma Davis
•Good thinking. I'll add that to my checklist. Seems like there are a lot of moving parts to this process that I wasn't aware of initially.
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Mateo Martinez
•Yeah, UCC filings seem simple but there are lots of details that can trip you up. Better to be overly cautious than have surprises during refinancing.
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Aisha Hussain
One more thing - if this is taking too long and your refinancing timeline is at risk, some new lenders will accept a title insurance policy that covers the UCC termination issue. Not ideal but it can keep deals moving while you sort out the paperwork. Just another option to consider if you get desperate.
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Emma Davis
•Interesting backup plan. Hopefully won't need it but good to know there are alternatives if everything gets bogged down in paperwork.
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Aisha Hussain
•Yeah it's not cheap but sometimes worth it to avoid deal delays. Most commercial lenders are familiar with this workaround.
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Ethan Clark
•Title insurance for UCC issues can get expensive though. Usually better to just pressure the original lender to do their job and file the termination properly.
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Zainab Abdulrahman
This thread has been incredibly helpful - thank you everyone for sharing your experiences! It sounds like the consensus is clear: I need to get that UCC-3 termination filed ASAP and the security release agreement alone won't cut it. I'm going to call the original lender's UCC department first thing Monday morning and be very direct about the timeline pressure from my refinancing. If they give me any runaround, I'll escalate immediately and potentially get my new lender involved to apply pressure from their end. Really appreciate the tips about documenting everything, checking for errors in the filing details, and getting certified copies once it's done. This community is a goldmine for practical advice on these kinds of situations that don't always get covered in the textbooks!
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