UCC definition of equipment causing collateral description problems on filing

This is exactly right about the specificity. We had similar issues last year with our equipment loan. The generic 'all equipment' description got kicked back three times before we listed actual categories.

Wait, so being bolted down doesn't automatically make it a fixture? I thought anything attached to real property was fixture territory and needed different UCC treatment.

Bolted down doesn't equal fixture automatically. The test is usually whether removal would damage the real property or if the item is specially adapted to the particular property. Industrial equipment is often bolted for safety but still considered equipment if it's moveable without structural damage.

How does that actually work? Do they have access to state-specific requirements or something?

You just upload your UCC filing documents and it cross-checks everything - debtor names, collateral descriptions, form requirements. It caught that our equipment description was too vague and suggested more specific language before we submitted.

Interesting, never heard of automated UCC checking. Does it handle fixture filing requirements too?

So true about the fixture complexity. We had a $200k rejection because we misclassified industrial HVAC as equipment when it needed fixture filing procedures.

HVAC is different though - that's actually integrated into the building systems. CNC machines aren't building components even if they're secured to concrete pads.

Exactly. Integration vs securing for operational purposes is the key distinction. Manufacturing equipment secured for vibration control is still equipment.

I feel your pain. The worst part is each rejection costs us time and sometimes additional filing fees depending on the state.

Have you tried calling the SOS filing division directly? Sometimes they'll give informal guidance over the phone about description requirements.

Tried that - got transferred three times and nobody could explain why our equipment description was insufficient. The whole system is broken.

The rejection notice specifically mentioned 'insufficient description of equipment collateral.' Our debtor name matches exactly what's on the loan docs so that's not the issue.

Some states are getting pickier about equipment descriptions post-COVID because of all the PPP loan UCC filings that were too vague. They want to see actual equipment types now.

That makes sense. The volume of generic equipment filings probably triggered more scrutiny across the board.

This is much better language than the generic approach. Specific enough to satisfy requirements but broad enough for practical coverage.

Should also add 'whether now owned or hereafter acquired' to make sure future equipment purchases are covered under the same filing.

Good point about the acquisition language. That's standard for equipment financing agreements.

Agree on the functional test. We've never had issues classifying manufacturing equipment - it's always the description specificity that causes problems.

True, but some states are requiring more granular descriptions now. The functional test works for classification but not always for filing acceptance.

Did it cost much to use? We're already over budget on this financing deal.

It's pretty reasonable considering how much time and hassle it saves. Definitely cheaper than multiple rejection fees and deadline extensions.

Anything that prevents UCC rejections is worth it. Time is usually more valuable than the tool cost anyway.

This is the right approach. Functional categories give the SOS enough detail while maintaining broad security interest coverage.

Should we worry about equipment purchased after the initial filing? Does the 'hereafter acquired' language actually work?

After-acquired property clauses are generally enforceable for equipment as long as the description is adequate. Just make sure your security agreement supports it.

Awesome! Good to hear you got it resolved. The specific category approach works much better than generic descriptions.

Glad it worked out. This thread will be helpful for others dealing with equipment description issues.

Perfect example of why equipment description specificity matters. Congrats on getting the filing through!