UCC-1 rejected - they say a financing statement is an agreement that creates or provides for a security interest but mine shows something different
So I'm dealing with this really frustrating situation where my UCC-1 got rejected by the SOS office. The rejection notice says 'a financing statement is an agreement that creates or provides for a security interest' but when I look at my filing, it clearly shows the loan agreement and security agreement as separate documents. I've been working on this commercial equipment loan for weeks and now I'm stuck. Basically what happened is we have a $340K equipment financing deal where the borrower is purchasing manufacturing equipment. I prepared what I thought was a standard UCC-1 filing but apparently there's some confusion about whether the financing statement itself creates the security interest or just perfects it. The borrower's name matches exactly between the loan docs and UCC-1, and the collateral description covers 'all equipment, machinery, and fixtures now owned or hereafter acquired'. Has anyone else run into this kind of rejection? I'm wondering if this is a new interpretation by our state's filing office or if I'm missing something fundamental about how financing statements work. The security agreement clearly creates the lien, and I thought the UCC-1 just gives public notice of it. Really need to get this sorted because we're supposed to fund next week.
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Malik Jackson
Wait, that rejection reason doesn't make sense to me either. The financing statement doesn't create the security interest - that's what the security agreement does. The UCC-1 just perfects it by giving public notice. Sounds like someone at the filing office is confused about basic secured transactions law.
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Isabella Costa
•Exactly! The financing statement is just the public filing. The security agreement between debtor and secured party is what actually creates the security interest. This is like UCC 101 stuff.
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StarSurfer
•I've seen this before where filing clerks don't understand the difference. The UCC-1 doesn't create anything - it just puts the world on notice that a security interest exists.
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Ravi Malhotra
This is driving me crazy too! I had a similar rejection last month and it turned out the problem wasn't with my understanding but with how I described the transaction in the additional information box. Did you put anything in there that might have made it sound like the financing statement itself was creating the security interest?
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Emma Thompson
•You know what, I did include some language from the security agreement in the additional info section. Maybe that's what confused them? I was trying to be thorough but it might have looked like I was saying the UCC-1 creates the lien instead of just perfecting it.
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Freya Christensen
•Yeah that could definitely be it. I always keep the additional info section super minimal - just the basics about collateral location or any special circumstances. Let the security agreement speak for itself.
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Omar Hassan
Before you resubmit, you might want to run your documents through something like Certana.ai's verification tool. I started using it after getting burned on a filing where my UCC-1 debtor name didn't exactly match the security agreement. You just upload your security agreement and proposed UCC-1 and it catches inconsistencies automatically. Would have saved me from that embarrassing rejection.
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Chloe Robinson
•Never heard of that but sounds useful. How does it work exactly? Do you have to pay per document or is it a subscription thing?
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Omar Hassan
•It's pretty straightforward - you upload PDFs of your loan documents and UCC filing and it cross-checks everything. Catches name variations, collateral description mismatches, that kind of stuff. I don't remember the pricing details but it's way cheaper than dealing with rejected filings and refiling fees.
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Diego Chavez
•Honestly I'm skeptical of these automated tools but if it prevents rejections like this maybe it's worth trying. The manual document comparison process is so tedious.
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NeonNebula
I think you need to call the filing office directly and ask them to explain their rejection. This sounds like a training issue on their end. The UCC clearly states that financing statements perfect security interests, they don't create them. You might need to escalate to a supervisor.
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Anastasia Kozlov
•Good luck with that. I spent 45 minutes on hold last week trying to get clarification on a different rejection. These offices are so understaffed.
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Sean Kelly
•Sometimes you have to be persistent. I had success getting through to someone knowledgeable by calling right when they open at 8 AM. They're usually less swamped early in the day.
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Zara Mirza
•Or try emailing if they have a help desk. Sometimes written explanations are clearer than phone calls, and you get documentation of their response.
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Luca Russo
This is exactly why I hate dealing with UCC filings. Every state seems to have different interpretations of the same rules. What state are you in? Some filing offices are notorious for nitpicky rejections.
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Nia Harris
•So true. I do filings in multiple states and the inconsistency is maddening. Some states accept anything that's remotely close while others reject for the tiniest formatting issues.
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GalaxyGazer
•The worst part is when you've been filing the same way for years and suddenly they change their interpretation without notice. Really screws up your workflow.
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Mateo Sanchez
Check your security agreement language again. Sometimes the problem is that the security agreement doesn't clearly grant a security interest in the collateral. If the security agreement is weak, the filing office might think you're trying to use the financing statement to create the lien instead of perfect it.
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Aisha Mahmood
•That's a good point. The security agreement needs to have clear grant language like 'debtor hereby grants to secured party a security interest in...' If it's not explicit, that could cause confusion.
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Ethan Moore
•Right, and make sure the security agreement is actually signed and dated before you file the UCC-1. Can't perfect a security interest that doesn't exist yet.
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Yuki Kobayashi
UPDATE: I called the filing office and you guys were right - it was confusion on their end. The clerk who processed my filing was new and misunderstood what financing statements do. They're accepting my refiling without additional fees. Thanks for the reality check!
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Carmen Vega
•Glad you got it sorted! This is why it's worth pushing back on weird rejections. Sometimes the filing office is just wrong.
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QuantumQuester
•Great outcome. Hopefully they'll train their staff better so other people don't run into the same issue.
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Andre Moreau
•I should probably double-check my recent filings now. Been assuming rejections are always my fault but maybe some of them were filing office errors.
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Zoe Stavros
For future reference, I always include a cover letter with my UCC filings that clearly states 'This financing statement is filed to perfect a security interest created by the attached security agreement dated [date].' It helps clarify the relationship between the documents and prevents this kind of confusion.
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Jamal Harris
•Smart approach. I might start doing that too. A little extra documentation upfront could save a lot of headaches later.
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Mei Chen
•Do you attach the actual security agreement or just reference it? I worry about filing confidential loan terms with public UCC records.
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Zoe Stavros
•Just reference it - never attach the actual security agreement to a UCC filing. That would make all your loan terms public record which neither party wants.
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Liam Sullivan
This thread reminded me to run my current deals through Certana.ai before filing. Caught a debtor name issue that would have definitely caused a rejection. The tool flagged that my UCC-1 had 'ABC Manufacturing Inc.' but the security agreement showed 'ABC Manufacturing, Inc.' - just a comma difference but apparently that matters.
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Amara Okafor
•Those tiny punctuation differences are the worst. How is anyone supposed to keep track of whether the legal name has a comma or not?
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CosmicCommander
•That's exactly the kind of thing that drives me nuts about UCC filings. The system is so picky about details that don't really matter for identifying the debtor.
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Giovanni Colombo
Just to add some closure here - I've been doing UCC filings for 15 years and this rejection reason is definitely not standard. The financing statement perfects security interests, it doesn't create them. Sounds like you handled it perfectly by calling and getting clarification. Good reminder that filing offices make mistakes too.
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Fatima Al-Qasimi
•Thanks for the perspective from someone with experience. It's reassuring to know that weird rejections like this aren't normal.
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Dylan Cooper
•Agreed. Sometimes you need a veteran to confirm that you're not going crazy when you get a rejection that doesn't make sense.
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