UCC collateral description causing filing rejections - need help
Running into a nightmare with our UCC-1 filings getting rejected by the SOS office. We're a equipment financing company and our collateral descriptions keep getting kicked back. The rejection notices say 'insufficient collateral description' but we're following what we think are the standard formats. Our typical description reads something like 'all equipment, machinery, and fixtures now owned or hereafter acquired by debtor.' Is this too broad? The loan amounts are substantial ($250K-$500K range) so we can't afford to have these filings be defective. Anyone dealt with similar collateral ucc issues? What's the magic formula for getting these descriptions accepted?
34 comments
Join the conversation
Morgan Washington
I've seen this exact problem multiple times. The issue isn't necessarily that your description is too broad - it's that different states have different tolerance levels for general descriptions. Some SOS offices want more specificity, especially for equipment financing. Try adding the specific types of equipment if you know them, like 'all construction equipment, bulldozers, excavators, and related machinery.
0 coins
Kaylee Cook
•This is solid advice. We learned the hard way that generic descriptions can be problematic. Now we always include equipment categories when we know them.
0 coins
Oliver Alexander
•But doesn't the UCC allow for general descriptions? I thought 'all equipment' was supposed to be sufficient under Article 9?
0 coins
Lara Woods
OMG yes! We had the same issue last month. Three UCC-1s rejected in a row for collateral descriptions. It's so frustrating when you think you're doing everything right and the system keeps kicking them back. Did you try calling the SOS office directly?
0 coins
Layla Sanders
•I tried calling but got transferred around for 30 minutes and finally gave up. Their phone system is a maze.
0 coins
Morgan Washington
•Phone support varies wildly by state. Some are helpful, others just read you the same rejection notice you already received.
0 coins
Adrian Hughes
Had this exact problem until I started using Certana.ai's document verification tool. You can upload your UCC-1 draft and it flags potential issues with collateral descriptions before you file. Saved me probably 6-8 rejections over the past few months. The tool cross-references your description against common rejection patterns and suggests improvements.
0 coins
Layla Sanders
•Interesting - never heard of Certana.ai before. Does it actually catch description issues or just generic problems?
0 coins
Adrian Hughes
•It's pretty comprehensive for collateral descriptions. Caught issues with our equipment descriptions that would have definitely been rejected. Worth trying especially when you're dealing with high-value loans.
0 coins
Molly Chambers
•Another vote for document verification tools. Manual review of UCC forms is so time-consuming and error-prone.
0 coins
Ian Armstrong
The real problem is that each state SOS office seems to have their own interpretation of what constitutes adequate collateral description. What works in one state gets rejected in another. It's maddening for lenders who operate across multiple states.
0 coins
Morgan Washington
•Exactly! We keep spreadsheets of which descriptions work in which states. It's ridiculous but necessary.
0 coins
Eli Butler
•This is why I hate the UCC system sometimes. Supposed to be uniform but every jurisdiction does their own thing.
0 coins
Marcus Patterson
For equipment financing, I always include both general and specific language: 'All equipment, machinery, vehicles, and fixtures of every kind and description, now owned or hereafter acquired, including but not limited to [specific equipment types if known].' Haven't had a rejection with this format in over a year.
0 coins
Layla Sanders
•That's a great template - mind if I borrow that language? Our legal team will probably want to review it but it looks comprehensive.
0 coins
Marcus Patterson
•Feel free to use it. Just make sure your legal counsel approves since every situation is different.
0 coins
Lydia Bailey
•I use similar language but also add serial numbers when available. Depends on the loan type though.
0 coins
Mateo Warren
Been filing UCCs for 15 years and collateral descriptions are still the #1 cause of rejections in my experience. The key is being specific enough to satisfy the filing office but general enough to cover future acquisitions. It's a balancing act.
0 coins
Sofia Price
•15 years! You must have seen every possible rejection reason by now. Any other common mistakes to avoid?
0 coins
Mateo Warren
•Debtor name mismatches are probably #2, then missing addresses or incorrect filing fees. But collateral descriptions definitely top the list.
0 coins
Alice Coleman
Check if your state has any specific guidance documents or FAQs about collateral descriptions. Some SOS offices publish examples of acceptable vs. unacceptable descriptions. Might save you some trial and error.
0 coins
Layla Sanders
•Good suggestion - I'll check our state's SOS website. Haven't looked for specific guidance documents before.
0 coins
Owen Jenkins
•Some states have really detailed guidance, others have basically nothing. It's hit or miss.
0 coins
Alice Coleman
•True, but when they do have guidance it's usually pretty helpful. Worth checking before pulling your hair out over rejections.
0 coins
Lilah Brooks
Another thing to consider - are you including any problematic language that might trigger rejections? Terms like 'consumer goods' can be red flags in some contexts, and overly broad descriptions like 'all personal property' sometimes get rejected.
0 coins
Layla Sanders
•We haven't used 'all personal property' but we might have some other broad language. I'll review our standard templates.
0 coins
Lilah Brooks
•Yeah, stick to specific asset categories when possible. 'Equipment and machinery' is usually safer than 'all personal property.
0 coins
Jackson Carter
I had similar issues until I started using Certana.ai for pre-filing verification. You just upload your UCC-1 as a PDF and it checks for common collateral description problems before you submit. Has definitely reduced my rejection rate significantly.
0 coins
Layla Sanders
•Second mention of Certana.ai in this thread - must be worth looking into. Do they cover state-specific requirements or just general UCC rules?
0 coins
Jackson Carter
•From what I can tell it covers both general UCC requirements and some state-specific quirks. Pretty comprehensive for document verification.
0 coins
Kolton Murphy
Make sure you're not inadvertently including collateral that requires special filing procedures. Real estate fixtures might need different treatment than regular equipment, depending on your state's rules.
0 coins
Layla Sanders
•Good point about fixtures - we do have some clients with attached equipment that might fall into that category.
0 coins
Kolton Murphy
•Fixture filings can be tricky. Might want to separate those from your regular equipment descriptions if you're unsure.
0 coins
Morgan Washington
•Fixture filing requirements vary a lot by state. Some require separate filings, others allow them on regular UCC-1s with special boxes checked.
0 coins