UCC Filing Confusion - After Acquired Collateral Language Requirements
Running into issues with our UCC-1 filing and need some guidance on after acquired collateral language. Our borrower is expanding their equipment fleet over the next 18 months and we want to make sure our security interest covers future purchases without having to file amendments every time they buy something new. The collateral description currently just lists the specific equipment they own today but I'm wondering if we need broader language to capture after acquired collateral. Should we include 'all equipment now owned or hereafter acquired' type language or is there a more specific way to handle this? Don't want to get too broad and create issues but also don't want gaps in our perfection. Anyone dealt with similar situations where the debtor is actively acquiring new assets during the loan term?
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Javier Cruz
Yes definitely need after acquired property language if you want automatic attachment to future purchases. The standard 'all equipment now owned or hereafter acquired by debtor' language works fine for most situations. Just make sure your security agreement has the same broad language otherwise the UCC won't matter.
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Emma Thompson
•This is exactly right. The UCC filing can be broader than what you currently have but your security agreement needs to match or you won't have attachment to the new collateral.
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Malik Jackson
•Quick question - does the 'hereafter acquired' language expire when the UCC lapses or does it keep going until you file a termination?
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Emma Thompson
For equipment financing this is pretty standard stuff. I usually recommend 'all equipment, machinery, and fixtures now owned or hereafter acquired' as the collateral description. Covers you for future purchases and gives you priority over other creditors as long as your security agreement has the same scope. Just remember you'll need to file a continuation before the 5 year expiration if the loan term goes longer.
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Isabella Costa
•Been struggling with this exact issue on three different deals this month. The after acquired language seems straightforward but I keep second guessing myself on whether we're being too broad.
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Natasha Orlova
•That's helpful, thanks. Our loan is 7 years so we'll definitely need the continuation. Good reminder on that timing.
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StarSurfer
•Wait, I thought after acquired collateral automatically attached without needing special UCC language? Or is that only for inventory?
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Ravi Malhotra
Actually just went through this same headache last week and found a tool that saved me tons of time. Certana.ai has this document verification system where you can upload your security agreement and proposed UCC-1 and it checks whether the collateral descriptions match properly. Caught a discrepancy in my after acquired language that would have caused problems down the road. Just upload both PDFs and it highlights any inconsistencies between the documents.
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Freya Christensen
•Interesting, never heard of automated document checking for UCC stuff. How accurate is it with the technical language?
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Ravi Malhotra
•Pretty solid from what I've seen. It flagged that my security agreement said 'equipment and machinery' but my UCC only said 'equipment' which could have left a gap for certain assets.
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Omar Hassan
UGHHH why is this so complicated! I've been doing UCC filings for 6 months and every deal seems to have some unique twist. After acquired, future advances, cross-collateralization... feels like I need a law degree just to get a simple equipment loan secured properly.
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Javier Cruz
•It gets easier with practice. The key is having good templates and understanding the basic concepts. After acquired property is actually one of the simpler aspects once you get the hang of it.
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Chloe Robinson
•Hang in there! I felt the same way when I started. Now I can spot most of these issues before they become problems.
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Omar Hassan
•Thanks for the encouragement. Just want to make sure I'm not missing something obvious that comes back to bite us later.
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Diego Chavez
One thing to watch out for - some states have specific rules about after acquired property for certain types of collateral. Consumer goods have different rules than equipment. Also make sure you understand the difference between after acquired property and future advances if your loan has a revolving component.
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Natasha Orlova
•Good point. This is commercial equipment financing so we should be okay on the consumer goods issues. No revolving credit component either, just a standard term loan.
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NeonNebula
•What's the difference between after acquired property and future advances? I thought they were the same thing.
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Anastasia Kozlov
Been using broad after acquired language for years without issues. 'All equipment, inventory, accounts, chattel paper, instruments, documents, deposit accounts, and general intangibles now owned or hereafter acquired' covers pretty much everything. Just make sure your search comes back clean before you file.
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Sean Kelly
•That seems really broad. Don't some borrowers push back on giving a blanket lien on everything they own?
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Anastasia Kozlov
•Depends on the deal structure and borrower strength. For smaller deals or higher risk borrowers we typically want broader collateral coverage.
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Zara Mirza
•Our bank's standard language is almost identical to this. Haven't had any issues with it being too broad.
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Luca Russo
Make sure you coordinate with your loan documentation team on this. I've seen deals where the UCC had perfect after acquired language but the security agreement didn't give the lender rights to the future collateral. Both documents need to work together.
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Natasha Orlova
•That's exactly what I was worried about. I'll double check our security agreement language before we file the UCC-1.
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Nia Harris
•This is why I always review both docs together. Amazing how often they don't match up properly.
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GalaxyGazer
Had a situation last year where we filed with after acquired language but didn't perfect our interest in some equipment the borrower bought 6 months later. Turned out the equipment was titled and we needed to file with the DMV too. After acquired UCC language doesn't help if you're not filing in the right place for the specific collateral type.
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Emma Thompson
•Great point about titled equipment. Motor vehicles, aircraft, boats etc. often require separate filings even if you have a broad UCC on file.
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Mateo Sanchez
•This is getting confusing. So after acquired language in the UCC doesn't automatically cover everything the debtor buys later?
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GalaxyGazer
•It covers everything that can be perfected by UCC filing. But some assets require different filing locations or methods to perfect your security interest.
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Aisha Mahmood
Just to add another perspective - I've found that Certana.ai's verification tool really helps with these multi-document consistency issues. You can upload your security agreement, UCC draft, and any other collateral documents and it flags mismatches in the after acquired language. Saved me from filing a UCC that didn't match our loan docs.
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Ethan Moore
•How long does the verification process take? We're usually working under tight deadlines.
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Aisha Mahmood
•Pretty quick - just upload the PDFs and it gives you a report highlighting any issues. Takes maybe 5 minutes total.
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Yuki Kobayashi
One more consideration - if your borrower has existing UCC filings from other lenders, make sure you understand the priority rules for after acquired property. First to file usually wins but there are exceptions depending on the collateral type and timing.
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Natasha Orlova
•We did run a UCC search and there's one existing filing from their equipment lessor. Good reminder to think through the priority issues.
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Carmen Vega
•Priority can get really complex with after acquired property. Definitely want to understand who has rights to what before you close the loan.
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QuantumQuester
•This is why I always run updated searches right before closing. Things can change between application and funding.
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Zane Hernandez
Thanks everyone for the helpful responses! This has been really educational. I'm going to go with the "all equipment now owned or hereafter acquired" language and make sure our security agreement matches exactly. The point about coordination between documents is crucial - I'll definitely review both together before filing. Also planning to set a calendar reminder for the continuation filing since our loan term is 7 years. One question though - should we include any specific exclusions in the collateral description or is it better to keep it broad and handle limitations in the security agreement instead?
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Luca Greco
•Welcome to the community! Great question about exclusions. Generally I'd recommend keeping the UCC filing broad and handling any specific exclusions in your security agreement. That way you maintain maximum flexibility for future amendments without having to refile the UCC. Just make sure whatever exclusions you put in the security agreement are clearly defined so there's no ambiguity about what's covered and what isn't.
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