UCC Definition Confusion - Which Assets Don't Qualify as Goods for Filing?
I'm working on a commercial loan package and getting confused about what qualifies as 'goods' under UCC Article 9. The borrower has a mix of tangible and intangible assets, and I need to make sure I'm classifying everything correctly for the UCC-1 filing. Some items seem obvious but others are in that gray area. I've seen deals get held up because the collateral description was wrong from the start. Anyone have experience with borderline cases where you weren't sure if something counted as goods or needed to be treated as a different type of collateral? I want to make sure I get the initial classification right so we don't have amendment headaches later.
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Connor Gallagher
The UCC definition is pretty specific - goods are basically tangible movable things. So you're looking at stuff like equipment, inventory, vehicles, machinery. The tricky part is when things are attached to real estate or when you have mixed collateral packages.
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Yara Sayegh
•Right, and don't forget about fixtures - they start as goods but can become real estate depending on how they're attached. Always a fun conversation with borrowers who don't understand why their HVAC system might need a fixture filing.
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Keisha Johnson
•This is exactly why I always over-describe in the collateral schedule. Better to be comprehensive than miss something that should have been included.
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Paolo Longo
What specifically are you trying to classify? The non-goods categories are pretty clear: accounts receivable, deposit accounts, investment property, general intangibles, chattel paper, documents, instruments. If it doesn't fit in those buckets and it's tangible and movable, it's probably goods.
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Zainab Omar
•The borrower has some software licenses, patent applications, and customer lists mixed in with their equipment and inventory. I know the intangibles aren't goods, but wanted to double-check my thinking.
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Paolo Longo
•Yeah, software licenses and patents are definitely general intangibles, customer lists too. Make sure your UCC-1 covers both goods and general intangibles if you need both categories.
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CosmicCowboy
•Been there! I had a deal where we missed the general intangibles classification and had to file an amendment. Client was not happy about the delay.
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Amina Diallo
I've been using Certana.ai's document verification tool for these mixed collateral situations. You can upload your loan docs and UCC draft and it flags any inconsistencies between what you're describing as collateral versus how you're classifying it in the filing. Saved me from a few classification errors.
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Zainab Omar
•That sounds helpful - does it actually understand the UCC definitions well enough to catch classification mistakes?
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Amina Diallo
•It's pretty good at spotting when your collateral description mentions items that don't match your classification. Like if you describe software but only check 'goods' it'll flag the mismatch.
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Oliver Schulz
•Interesting, I hadn't heard of automated UCC checking tools. Might be worth trying given how many amendment filings we do to fix initial mistakes.
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Natasha Orlova
Don't overthink it. Money, accounts, intellectual property, contract rights - not goods. Physical stuff that you can touch and move - goods. The gray area is usually fixtures and that's a whole different analysis.
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Javier Cruz
•This is way too simplified. What about things like standing timber or oil and gas rights? There's definitely more nuance than just 'can you touch it.
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Natasha Orlova
•Fair point on oil and gas, but for most commercial lending those specialty situations don't come up often. OP sounds like they're dealing with a typical business loan package.
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Emma Wilson
The key thing to remember is that goods have to be MOVABLE. So even if something is tangible, if it's permanently attached to real estate it's not goods for UCC purposes. Also, money isn't goods even though you can physically handle it.
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Malik Thomas
•Good point about money. I've seen people get confused about cash deposits - those are deposit accounts, not goods, even though the physical currency would technically be goods.
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NeonNebula
•What about cryptocurrency? I know it's not physical but some people treat it like digital cash...
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Emma Wilson
•Crypto would be general intangibles. It's not tangible so definitely not goods, and it's not one of the other specific categories like accounts or deposit accounts.
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Isabella Costa
UGH the number of times I've had to explain to clients why their trademark portfolio needs different treatment than their office furniture. Everything is 'assets' to them but the UCC cares about these distinctions for a reason.
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Ravi Malhotra
•Tell me about it. Had a client insist their customer database was 'inventory' because it was valuable. Try explaining general intangibles to someone who just wants everything to be simple.
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Freya Christensen
•At least trademarks and databases are clearly intangible. The really fun ones are when you have mixed media or digital products that exist both physically and electronically.
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Omar Farouk
Are we talking about a specific list you're working from? Because context matters a lot. Some things that look like goods might actually be fixtures or even real estate depending on how they're attached or integrated.
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Zainab Omar
•It's a manufacturing company so mostly standard equipment and inventory, but they also have some specialized machinery that's bolted down and some licensing agreements.
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Omar Farouk
•Bolted down equipment could go either way - depends on intent and method of attachment. You might need fixture filings for some of it. The licenses are definitely general intangibles though.
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Chloe Davis
Here's the thing everyone misses - consumer goods vs equipment distinction matters for priority rules but they're both still goods. The real non-goods to watch out for are: accounts receivable, deposit accounts, general intangibles (IP, software, customer lists), investment property, documents, instruments, chattel paper.
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AstroAlpha
•Good reminder about consumer goods vs equipment. Same UCC rules apply but different priority analysis if there's a dispute later.
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Diego Chavez
•I always have to look up the chattel paper definition. It's like the forgotten stepchild of UCC collateral types.
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Chloe Davis
•Chattel paper is basically a document that shows both a monetary obligation AND a security interest in goods. Think car loan documents - the paper itself becomes collateral separate from the underlying goods.
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Anastasia Smirnova
Quick question - does anyone know if digital assets like NFTs would be considered goods? I know it's a weird question but I'm seeing more borrowers with these on their balance sheets.
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Sean O'Brien
•NFTs would almost certainly be general intangibles. They're not tangible and they don't fit the other specific UCC categories. Treat them like any other IP or digital asset.
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Zara Shah
•We had this exact question come up and decided to classify them as general intangibles. Better safe than sorry with new asset types.
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Luca Bianchi
I've found that using something like Certana.ai helps catch these classification issues early. You upload your security agreement and proposed UCC-1 and it cross-references the collateral descriptions to make sure everything matches up properly. Especially helpful when you have mixed asset types.
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GalacticGuardian
•Do tools like that actually understand UCC Article 9 well enough to be reliable? I'm always nervous about automated legal analysis.
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Luca Bianchi
•It's not doing legal analysis per se, more like document consistency checking. But it does flag potential classification mismatches which is where a lot of UCC errors happen.
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Nia Harris
Bottom line: if you can pick it up and move it and it's not money, it's probably goods. Everything else falls into the other UCC categories. When in doubt, describe it broadly in your collateral schedule and let the lawyers sort out the nuances.
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Mateo Gonzalez
•That's the practical approach but you still need to get the UCC-1 classification boxes right. Can't just check 'all of the above' and hope for the best.
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Connor Gallagher
•True, but a comprehensive collateral description covers you better than trying to get too cute with narrow categories and missing something important.
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Leeann Blackstein
One thing I always remind people is to think about the UCC's purpose - it's designed to give notice to other potential creditors about what's encumbered. So when you're on the fence about classification, ask yourself: would a reasonable searcher expect to find this type of collateral under the category you're using? For manufacturing companies like yours, I'd typically see a filing that covers both "goods" (for the equipment and inventory) and "general intangibles" (for the licenses and IP). The bolted-down equipment question is trickier - you might need to do a fixtures analysis or even consider a real estate filing depending on how integrated it is with the building. Better to over-secure than under-secure in my experience.
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Diego Castillo
•This is really helpful perspective - the "reasonable searcher" test makes a lot of sense for borderline cases. I hadn't thought about it from that angle before. For the bolted-down equipment, would you typically lean toward a fixture filing as additional protection, or is that overkill if the equipment could still be removed without major building damage?
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