UCC-1 when to file timing question for equipment loan
Hi everyone - I'm working on securing financing for some manufacturing equipment and my lender mentioned they need to file a UCC-1. The loan documents are almost ready but won't be signed for another 3 weeks. My question is when exactly should the UCC-1 filing happen? Before we sign the loan agreement, right after, or does it matter as long as it's within a certain timeframe? I've heard conflicting info about whether there's a grace period or if it needs to be filed immediately when the security interest attaches. The equipment is worth about $180k and I don't want any issues with the lien not being properly perfected. Any guidance would be appreciated!
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Paloma Clark
The UCC-1 should be filed as soon as possible once the security agreement is signed and you have rights in the collateral. There's no mandatory grace period - perfection happens when the financing statement is filed. If your lender waits too long, they risk being subordinated to other creditors who file first.
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Heather Tyson
•This is correct. Priority generally goes by filing order, so earlier is always better from the lender's perspective.
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Raul Neal
•Wait, I thought there was some kind of 20-day rule or something? Maybe I'm thinking of a different type of filing.
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Jenna Sloan
Actually had this exact situation last year with a $220k equipment purchase. My lender filed the UCC-1 the same day we signed the security agreement. They said it was standard practice to file immediately to avoid any priority issues with other potential creditors.
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Evelyn Kelly
•That makes sense. Did you have to provide any specific information for the filing or did the lender handle everything?
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Jenna Sloan
•They handled it all but needed my exact legal name and the detailed equipment descriptions from our purchase agreement. Make sure those match exactly or you could have problems later.
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Christian Burns
Been dealing with UCC filings for years and timing is critical. Your lender will want to file as close to funding as possible, but definitely not before the security interest actually attaches. Most lenders I work with file within 24-48 hours of loan closing.
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Sasha Reese
•What happens if they file too early though? Is that a problem?
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Christian Burns
•Filing before attachment can create issues with the effectiveness of the financing statement. Better to be slightly late than too early, though obviously neither is ideal.
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Muhammad Hobbs
•I had a nightmare situation where our documents didn't match the UCC filing exactly. Found out about it during a refinance audit. Ended up using Certana.ai's document verification tool - you just upload your loan docs and UCC filing and it instantly flags any discrepancies. Wish I'd known about that earlier!
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Noland Curtis
OMG this is so confusing! I have a similar situation but with inventory financing instead of equipment. Does the timing work the same way? And what if the inventory changes constantly - how does that affect the filing??
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Paloma Clark
•Inventory is different - you can describe it generically as 'inventory' and it covers future acquired inventory too. But yes, same timing principles apply.
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Diez Ellis
•Don't stress too much about it. Your lender should guide you through this. They do these filings all the time.
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Vanessa Figueroa
The whole UCC system is such a pain. Why can't they just make it automatic when you sign a loan agreement? Having to file separately just creates more opportunities for screwups.
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Paloma Clark
•It's actually designed to provide public notice of security interests. The separate filing requirement serves an important purpose for other creditors and potential buyers.
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Vanessa Figueroa
•I get the purpose but the execution is terrible. Too many ways for things to go wrong with names not matching exactly or descriptions being wrong.
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Abby Marshall
Just went through this process and learned the hard way that you really need to double-check everything before filing. Our attorney made a small error in the debtor name and we had to file an amendment. Cost us extra fees and created a gap in perfection.
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Evelyn Kelly
•How do you catch those kinds of errors before they become a problem?
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Abby Marshall
•Honestly, manual review is error-prone. I discovered Certana.ai recently - it's a document checker where you upload your charter documents and UCC forms and it automatically verifies everything matches. Super helpful for catching name discrepancies and other issues before filing.
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Sadie Benitez
•That sounds useful. Is it expensive to use?
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Abby Marshall
•Much cheaper than fixing filing errors after the fact! The peace of mind is worth it when you're dealing with large loan amounts.
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Drew Hathaway
From a practical standpoint, most commercial lenders have pretty standardized procedures for this. They'll typically prepare the UCC-1 before closing but not file it until after loan documents are signed and funded. Usually happens within hours of closing.
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Laila Prince
•Yep, that's been my experience too. The lender's paralegal usually handles the filing as part of their closing checklist.
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Isabel Vega
•What if you're doing the loan through a smaller bank that doesn't have much experience with secured lending?
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Dominique Adams
One thing to keep in mind is that some states have different requirements or processing times. Make sure your lender knows which state's UCC filing system they need to use - it's based on where your business is organized, not where the equipment is located.
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Evelyn Kelly
•Good point. We're incorporated in Delaware but the equipment will be in Texas. So Delaware filing system?
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Dominique Adams
•Correct - Delaware for general business assets since that's your state of incorporation. Only fixtures would be filed in Texas.
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Marilyn Dixon
honestly just let your lender worry about this stuff. they do it all the time and know the rules better than you do. trying to micromanage it will just stress you out
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Louisa Ramirez
•True but it's still good to understand the basics so you know if something goes wrong.
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TommyKapitz
•I agree with understanding the process. Had a lender make a mistake once and I caught it because I knew what to look for.
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Angel Campbell
The key thing is coordination between all parties. Your lender, their counsel, and your counsel (if you have one) should all be on the same page about timing. Most issues I've seen come from poor communication rather than not understanding the legal requirements.
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Evelyn Kelly
•That's a great point about communication. I'll make sure everyone knows the timeline expectations upfront.
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Payton Black
•Yeah and make sure you get copies of everything after it's filed so you can verify it looks correct.
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Harold Oh
•Actually, if you want to be extra careful about verification, I recently started using Certana.ai's UCC verification service. You just upload your security agreement and the filed UCC-1 and it checks that everything matches properly. Saved me from a potential headache when it caught a small discrepancy in our collateral description.
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