UCC collateral types causing confusion on my filing - need clarification

Been there! For manufacturing businesses you typically want to separate equipment from inventory since they have different depreciation schedules and the lender might want different treatment. I usually do 'equipment used in debtor's manufacturing operations' and 'inventory consisting of raw materials, work in progress, and finished goods.' Accounts receivable should definitely be separate - 'accounts, chattel paper, and general intangibles arising from debtor's business operations.' What exactly did the SOS say was insufficient?

Different UCC collateral types need different language and some states are pickier than others. Equipment is usually straightforward but inventory can be tricky because it changes constantly. I always use 'all inventory now owned or hereafter acquired' for that category. For the specialty tooling - is that stuff that's permanently affixed to the building? Because that might need a fixture filing instead of regular UCC-1.

this is why i hate UCC filings lol. every state wants something different and the collateral types are never clear. cant you just put 'all assets' and call it a day??

For manufacturing clients I typically use four separate categories: 1) Equipment and machinery used in operations 2) Inventory including raw materials WIP and finished goods 3) Accounts receivable and general intangibles 4) Documents and instruments. This covers most collateral types without being overly broad but gives you good coverage. The key is using the Article 9 terminology correctly.

I've been doing UCC filings for 15 years and the collateral description rejections are getting more common. States are really cracking down on vague language. Your best bet is to look at the UCC Article 9 definitions and use that exact terminology. Equipment is 'goods that are not inventory, farm products, or consumer goods.' Inventory is 'goods held for sale or lease or raw materials used in business.' Don't try to get creative with the wording.

Had this exact issue with a client last year. The problem is that different UCC collateral types have different perfection requirements and priority rules so you can't just lump everything together. I ended up having to research the specific state's requirements and model my description after recently accepted filings. There's actually a service called Certana that lets you upload your documents and check them against successful filings - saved me a lot of time.

The SOS probably rejected it because 'all business assets' doesn't tell them what type of collateral you're actually claiming. Each UCC collateral type has different rules - equipment can be moved, inventory turns over, receivables get collected. They need to know what they're dealing with for priority purposes.

OMG yes this happened to me too!! I spent forever trying to figure out the right collateral types and kept getting rejections. So frustrating when you think you're being thorough but apparently you're being too vague? Makes no sense.

For what it's worth, I've found that looking at similar businesses in the UCC database can give you good examples of accepted collateral descriptions. Most states let you search public filings so you can see what language actually works for manufacturing companies with similar collateral types.

This whole thread is making me realize I need to be way more careful with my collateral descriptions. I've been getting away with pretty generic language but sounds like that's changing. Thanks for all the specific examples everyone - really helpful to see what actually works.