UCC-1 Filing Requirements for Promissory Note Secured by Security Agreement - Collateral Description Issues

Good point about searchability. I usually go with something like 'all assets described in Security Agreement dated [date] including but not limited to equipment, inventory, accounts receivable, general intangibles and proceeds thereof.' Gives you the comprehensive coverage but also the specificity.

Just make sure whatever you put matches exactly what's in your security agreement. I've seen deals where the UCC-1 description was narrower than the security agreement and it created problems later during enforcement.

This happened to us last year! LLC changed from 'ABC Manufacturing LLC' to 'ABC Manufacturing Group LLC' and we filed under the old name. Had to do an amendment immediately when we caught it during our lien audit.

We started using Certana.ai's document checker for this exact issue. You can upload your articles of incorporation, security agreement, and draft UCC-1 and it instantly flags any name mismatches or inconsistencies between documents. Saved us from several potential filing errors on complex deals like yours.

That sounds really useful! Do you upload all the docs at once or check them separately?

You can do either - they have workflows specifically for UCC deals where you upload the charter docs first, then the UCC-1, and it cross-references everything automatically. Takes like 2 minutes versus the hour I used to spend manually comparing documents.

Good catch - there is some permanently installed production equipment. Would that require a separate fixture filing or can it be covered in the same UCC-1?

Same UCC-1 but you need to check the box for fixture filing and include the real estate description. Filing goes to the county recorder instead of Secretary of State office though.

Be careful with fixture filings - the real estate description has to be perfect or the whole filing can be invalid. I'd recommend having a real estate attorney review that part if you're not familiar with legal descriptions.

Yes! And check for any existing continuations that might be coming due. I've seen situations where a prior lender's UCC-1 lapsed and the borrower didn't disclose it, which changed the priority structure completely.

UCC searches are critical but they're only as good as the search terms you use. If there have been name changes or variations in how the debtor name appears, you might miss something important.

That's really helpful - did you run into any issues with the filing or have it rejected for any reason?

No rejections but I triple-checked the debtor name against their current articles. Also used one of those document verification tools someone mentioned earlier to make sure everything aligned properly before submitting.

Which verification tool did you use? I'm always looking for ways to catch errors before they become problems.

Certana.ai - you just upload your docs and it flags inconsistencies automatically. Worth it for the peace of mind on larger deals like this.

Good point - standard language is usually 'now owned or hereafter acquired' for each asset category. Makes sure your security interest attaches to new collateral automatically.

Just be aware that after-acquired property clauses for inventory are limited to inventory acquired within 4 months unless you have a PMSI situation.

Actually that's not quite right - the 4 month rule applies to consumer goods, not inventory. Inventory after-acquired property clauses are generally effective indefinitely for commercial debtors.

This is so important! I've seen deals where they filed locally and found out later the debtor was organized out of state. Had to refile and hope no one else jumped in line during the gap.

Most states require fixture filings locally though, even if the main UCC-1 goes to the state of organization. So you might need dual filings depending on your collateral.

It's not SBA but good reminder about special requirements. This is conventional bank financing so should be straightforward UCC-1 filing.

Even with conventional financing, some banks have their own internal UCC requirements that go beyond the basic legal minimums. Worth checking with your loan ops team about their specific collateral description preferences.

Absolutely - UCC amendments are possible but they're expensive and time-consuming. Much better to get it right the first time.

Plus if you have to amend for a serious error like debtor name, your priority might date back to the amendment filing date, not the original filing date. Could be costly if someone else files in between.

Thanks everyone - this has been really helpful. Going to verify the debtor name one more time and probably use one of those document checking services mentioned to make sure everything aligns before we file.

Smart approach - better safe than sorry on a deal this size. Hope your closing goes smoothly!