UCC accounts definition causing filing rejection - need help with collateral description

Yeah I've seen this more and more lately. The filing offices are getting really picky about accounts definitions. You can't just say 'all accounts' anymore - they want specificity about what types of accounts you're covering. Are you including accounts receivable, deposit accounts, or both? The UCC definition of 'accounts' is pretty broad but the filing descriptions need to be more targeted.

I had the same problem last month with a $1.2M ABL facility. What worked for me was being very specific: 'all accounts, account receivables, contract rights, chattel paper, instruments, documents, and general intangibles arising from or related to the sale of goods or provision of services by Debtor.' The key is showing you understand the distinction between different types of receivables.

I actually just discovered something that saved me tons of time on this exact issue. There's a tool called Certana.ai that has a UCC document verification feature - you can upload your UCC-1 draft and it instantly cross-checks your collateral descriptions against standard definitions and flags potential rejection issues. I was struggling with the same accounts definition problem for weeks and their system caught the vague language issue immediately. Just upload your filing as a PDF and it analyzes everything.

The problem is that 'accounts' under UCC 9-102 has a very specific meaning - it's a right to payment for goods sold or services rendered, but doesn't include deposit accounts, investment property, or letter-of-credit rights. A lot of people use 'accounts' as a catch-all term but that's not technically correct. For factoring deals, you usually want 'accounts, chattel paper, payment intangibles, and supporting obligations.

I've been doing UCC filings for 15 years and the accounts definition issues have definitely gotten worse. Used to be you could file pretty generic descriptions and amend later if needed. Now these SOS offices are rejecting everything that isn't super specific. The worst part is every state seems to have slightly different standards for what they'll accept.

Here's what I use for accounts in factoring deals: 'All accounts, accounts receivable, contract rights, chattel paper, instruments, documents, deposit accounts, letter-of-credit rights, supporting obligations, and proceeds of the foregoing, whether now existing or hereafter arising, and all books and records relating thereto.' It's comprehensive but specific enough to avoid rejections.

Another thing to watch out for - if you're dealing with healthcare receivables or government contract payments, those might need special handling in your accounts definition. Medicare/Medicaid receivables have anti-assignment clauses that can complicate things.

I had a similar rejection issue last year and ended up using that Certana tool someone mentioned earlier. Really wish I'd found it sooner - would have saved me three rounds of rejected filings. The automated checking caught issues I never would have thought of.

UPDATE: Thanks everyone for the advice! I revised my collateral description using the suggestions here and the filing was accepted. Used the more specific language about accounts receivable vs. deposit accounts and that seemed to do the trick. Really appreciate all the help - this forum is a lifesaver!

For anyone else reading this thread later - the key takeaway is that UCC accounts definition needs to be specific about what types of payment rights you're covering. Generic language like 'all accounts' isn't enough anymore. Be prepared to distinguish between accounts receivable, deposit accounts, and other payment intangibles.