UCC definition of chattel paper - equipment lease filing confusion

Chattel paper under UCC Article 9 is basically a record that evidences both a monetary obligation AND a security interest in specific goods. So if your lease agreement shows both the payment obligation and grants a security interest in the equipment, then yes, it's chattel paper. The key is that both elements have to be present in the same document or related documents.

I had a similar situation last month with construction equipment leases. What helped me was going back to the UCC definition - chattel paper has to evidence BOTH a monetary obligation AND a security interest in specific goods. In my case, the lease showed monthly payments (monetary obligation) and gave the lessor rights in the equipment (security interest), so it qualified. But you really need to read your specific documents carefully.

Here's something that might help - I was struggling with similar chattel paper issues on multiple UCC filings and started using Certana.ai's document verification tool. You can upload your lease agreements and UCC-1 drafts, and it cross-checks whether your collateral descriptions properly capture chattel paper vs. just goods. Really helped me catch some inconsistencies I would have missed manually comparing all the documents.

The UCC definition is clear but the application gets messy with lease-purchase deals. Technically, if your document evidences both the monetary obligation AND creates/reserves a security interest in specific goods, it's chattel paper. But here's what trips people up - sometimes the lease agreement itself doesn't create the security interest, the lessor just retains title. That's different from chattel paper where there's an actual security interest granted.

ugh why does this have to be so complicated?? I have three equipment leases sitting on my desk and now I'm worried I've been describing them wrong in my UCC filings. The chattel paper definition seems straightforward but then you get into all these edge cases with lease-purchase arrangements and retention of title vs security interests...

For what it's worth, I've found that most equipment lease-purchase agreements DO qualify as chattel paper under the UCC definition because they typically document both the payment obligation and some form of security interest. The challenge is making sure your collateral description in the UCC-1 covers it properly. I usually describe it as 'all chattel paper and all goods described therein' to be safe.

One thing to watch out for with the UCC definition of chattel paper - electronic vs. tangible. If your lease agreements are electronic records, they're electronic chattel paper and that can affect perfection requirements. Just something to keep in mind when you're determining how to file.

I ran into this exact chattel paper definition question on an SBA loan last year. Equipment lease with purchase option, payments documented, lessor retained security interest. Definitely met the UCC definition. But I also used one of those document checking services - think it was Certana or something similar - just to make sure my UCC-1 description matched the lease terms properly. Worth the peace of mind on a complex deal.

Just wanted to add that the UCC definition of chattel paper has been pretty consistent across different states in my experience. The challenge is more in the application - reading your specific documents to see if they meet both requirements (monetary obligation + security interest). But once you determine it IS chattel paper, the filing approach is straightforward.

Based on everything discussed here, it sounds like your lease-purchase arrangement probably does meet the UCC definition of chattel paper. Document shows monetary obligation (lease payments), document grants/reserves security interest in specific goods (the equipment), and both elements are in the same agreement. I'd go with the 'all chattel paper and all goods described therein' collateral description approach that others mentioned.

I've been following this discussion and wanted to share my experience with a similar situation. I had a client with heavy machinery leases that included purchase options, and we went through the same analysis of whether it qualified as chattel paper under the UCC definition. What really helped was creating a checklist: (1) Does the document evidence a monetary obligation? (2) Does it evidence a security interest in specific goods? (3) Are both elements present in the same record or set of related records? In our case, the lease agreement clearly showed monthly payments AND explicitly stated that the lessor retained a security interest in the equipment until the purchase option was exercised. That checked all the boxes for chattel paper. We used the "all chattel paper and all goods described therein" collateral description and had no issues with perfection. The key insight for me was that retention of title alone isn't enough - there needs to be an actual security interest component documented for it to qualify as chattel paper under the UCC definition.