UCC collateral description rejected twice - equipment financing nightmare

That's way more detailed than what I had. Do I need to list every single piece of equipment though? We're talking about 30+ machines here.

No, you don't need to list everything individually. The key is using descriptive categories that clearly identify the type of collateral while using "including without limitation" language to show it's not exhaustive. Your current description was too generic - "all machinery" could mean anything.

Location is huge! I've seen UCC-1s get challenged later because equipment got relocated and the collateral description was too location-specific. Always include "wherever located" language for equipment that might move.

Good point about location. Some of this equipment does get moved between our facilities for different projects. I definitely need to account for that.

How does that work exactly? Do they compare it against successful filings or something?

You just upload your UCC-1 PDF and it analyzes the collateral description for common rejection triggers - too broad, too narrow, missing required elements, location issues, etc. It's been really helpful for catching problems before they become expensive rejections.

That actually sounds useful. At this point I'll try anything to avoid a third rejection. This deadline is killing me.

That's good general language but some states want more specificity for equipment financing. You might need to add specific equipment categories relevant to the debtor's industry.

True, it depends on your jurisdiction. I usually customize based on the specific industry and what equipment is actually being financed. Generic descriptions are rejection magnets.

That's actually really smart. I should have done that instead of winging it. Do you have any examples for CNC equipment specifically?

For CNC equipment I usually go with something like "All computer numerical control machines, machining centers, lathes, milling machines, and related tooling, dies, fixtures, and accessories, including all software and programming related thereto, now owned or hereafter acquired by Debtor.

That's solid. The software and programming language is important for CNC equipment since that's often a significant part of the value.

The terminology can make a difference legally too, not just for filing acceptance. "Manufacturing equipment" might have different coverage implications than "industrial equipment" depending on the debtor's business.

fair point but it's frustrating when you're just trying to get the filing accepted and they're picking apart word choices

I didn't think about proceeds language. That's probably important for a revolving credit facility where they might be upgrading equipment regularly.

Exactly. Equipment financing often involves trade-ins and upgrades, so you need proceeds coverage to maintain your security interest when the original collateral gets disposed of.

Proceeds language is standard in most UCC-1 forms now but make sure it's explicit in your collateral description too, especially for equipment that has high turnover.

Does it work for all states or just certain ones? I file in multiple jurisdictions and the requirements seem to vary.

It covers all states and identifies jurisdiction-specific requirements. Really helpful for multi-state filers who need to adjust their descriptions based on local filing office preferences.

That makes sense. I think my description was way too generic. I need to show I understand what equipment is actually involved in the financing.

Right, and it also helps with enforcement later if you need to foreclose. More specific descriptions make it easier to identify exactly what collateral you have rights to.

Good point. I was so focused on just getting it filed that I wasn't thinking about the enforcement side. This is a learning experience for sure.

Exactly. A properly drafted collateral description protects your interests throughout the loan term, not just at filing. It's worth getting it right the first time rather than dealing with problems later.

This is why I always recommend getting legal review for complex collateral descriptions. The cost upfront is nothing compared to the problems you avoid later.

Glad it worked out! Equipment collateral descriptions are definitely an art form. Good to hear you got it resolved before your closing deadline.

Congrats on getting it through. Those repeated rejections are stressful, especially with a closing deadline looming.

Thanks! Lesson learned about being more specific with collateral descriptions. Definitely keeping better templates for future equipment financings.