UCC 1 document confusion - filed but lender says they need something else?

They mentioned wanting to add specific serial numbers for some of the larger equipment pieces, and something about making sure future purchases are covered under the same filing. The loan amount did increase by about 40% a few months ago when we expanded operations.

Ah that makes sense then. When loan amounts increase significantly, lenders often want more specific collateral identification to make sure their security interest is properly protected. The broad language should still be valid but they probably want belt-and-suspenders coverage.

Good point about getting clarification first. Sometimes lenders request amendments they don't actually need just to feel better about their file documentation. The original broad language might be perfectly adequate legally.

That's helpful to know it's not necessarily a problem with what we did. I was worried we'd made some major mistake on the original filing.

You should definitely push back and ask them to explain specifically why the current filing is inadequate. Don't just accept that you need to spend money on amendments without understanding the reasoning.

Interesting - I hadn't thought about checking the alignment between documents. The security agreement does have more detailed equipment descriptions than what we put on the UCC-1 filing.

That's actually a really good point. The UCC-1 doesn't need to repeat every detail from the security agreement, but they should be consistent enough that there's no question about what's covered.

Exactly! The legal standard for collateral descriptions is that they need to reasonably identify the property, not provide an exhaustive inventory. Broad descriptions are often stronger than overly specific ones.

That's reassuring. I was starting to think we'd done something fundamentally wrong with the original UCC 1 document.

Still, if the bank is insisting on amendments and you need to maintain a good relationship with them, it might be worth considering. Just make sure they're paying for the filing fees if it's their request.

I feel this frustration! Banks can be so inconsistent about what they want in UCC filings. One loan officer says broad descriptions are fine, then their successor wants everything itemized down to the last bolt.

Yeah, it's definitely frustrating when you follow their original instructions and then they want something different later.

Good thinking about batching changes together. I'll ask them if there's anything else they're considering beyond the equipment serial numbers.

Definitely important to make sure amendments don't narrow coverage. I've seen cases where trying to be more specific actually reduced the scope of the security interest.

Great point about not narrowing coverage. When you add specific serial numbers, make sure the amendment language says 'including but not limited to' or 'among other property' to preserve the broad coverage.

That would have been smart to do initially. Do you think it's worth checking now to see if there are actual inconsistencies or if the bank is just being overly cautious?

Definitely worth checking now. If the documents are consistent, you'll have solid evidence to push back on unnecessary amendments. If there are real issues, at least you'll know what actually needs to be fixed rather than guessing.

Thanks for the perspective. It's helpful to know this is common and not necessarily a sign that we did something wrong initially.

Exactly - it's almost always about their internal policies changing, not about legal requirements. Stand your ground unless they can point to specific legal deficiencies.

Ugh, that's annoying. Did you at least negotiate for them to cover the filing fees since it was their request?

tried to but they said it was borrower responsibility. picked our battles since we needed to maintain good relationship for future financing

Sometimes it's worth eating the fees to keep the relationship smooth, especially if you'll need additional financing later. Frustrating but practical.

Yes, sorry for the confusion - I meant the UCC-1 financing statement. And yes, they're talking about filing a UCC-3 amendment to add more detailed collateral descriptions.

Ok good, just wanted to make sure. The terminology can get confusing when people say 'UCC 1 document' because there are different forms in the UCC-1 series.

That's a good approach. I'll ask them to put their concerns in writing so I can understand exactly what they think is missing.

Smart move. Getting their concerns in writing will either reveal legitimate issues or expose that they're just being overly cautious. Either way, you'll know how to proceed.

Plus having their concerns documented protects you if there are issues later. Shows you were responsive to their requests even if the amendments weren't legally necessary.