UCC factoring agreement debtor name variations causing filing headaches
Having major issues with our UCC factoring setup and wondering if anyone else has dealt with this nightmare. We have a client who factors their receivables and the factor requires UCC-1 filings on all the accounts. Problem is our client operates under three different business variations - ABC Manufacturing LLC, ABC Mfg LLC, and ABC Manufacturing Limited Liability Company. The factor's UCC-1 filings use different name variations and now we're getting conflicting search results when we run lien searches. Some filings show up under one name but not the others. The client is freaking out because they think their factoring agreement might be compromised if the UCC filings don't properly secure the receivables. Has anyone navigated UCC factoring with multiple debtor name variations? What's the proper way to handle this so all the receivables are actually secured?
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Adrian Hughes
This is a classic factoring mess. I've seen this exact scenario destroy deals because the factor thought they had perfected security interest but gaps in the debtor name matching meant some receivables weren't covered. You need to get the exact legal name from the Secretary of State records and make sure ALL UCC-1 filings use that precise name. No variations, no abbreviations.
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Molly Chambers
•Totally agree on getting the SOS name right. We learned this the hard way when a factoring client's UCC search missed half their filings because of name inconsistencies.
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Ian Armstrong
•But what about trade names? Don't you also need to file under those if the receivables are generated under different business names?
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Eli Butler
UCC factoring is tricky because you're dealing with accounts receivable as collateral which means the debtor name has to be PERFECT. One letter off and your security interest could be worthless. I'd run a comprehensive UCC search under all name variations first to see what's actually on file, then figure out what needs to be amended or terminated.
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Marcus Patterson
•This sounds like a job for professional help. Have you considered using something like Certana.ai? I used their document verification tool when we had similar UCC factoring name issues. You just upload your corporate docs and UCC filings and it instantly flags any name mismatches or inconsistencies. Saved us from a potential disaster.
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Lydia Bailey
•How comprehensive are these UCC searches? I always worry I'm missing something when there are multiple business names involved.
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Mateo Warren
Oh boy, been there with factoring deals. The receivables are the whole point of the security interest so if your UCC filings are inconsistent you could have gaps in your perfection. Factors hate this because it means they might not actually own some of the accounts they think they purchased.
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Sofia Price
•Exactly! And if the factor doesn't have a perfected security interest in all receivables, they're taking on way more risk than they bargained for.
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Alice Coleman
•What happens if there's already a UCC-1 on file with the wrong debtor name variation? Do you have to terminate and refile or can you just amend?
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Adrian Hughes
•You typically need to file a new UCC-1 with the correct name and then terminate the incorrect one. Amendments usually can't fix debtor name errors.
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Owen Jenkins
I'm dealing with something similar but mine is even worse - our factoring client has been doing business under names that aren't even registered! The factor's UCC filings are all over the place and I don't know where to start cleaning this up.
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Lilah Brooks
•That's a compliance nightmare waiting to happen. You need to get those business names properly registered before you can even think about fixing the UCC issues.
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Jackson Carter
•Wow, that's worse than name variations - that's potentially invalid business operations. Hope your factor knows what they're getting into.
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Kolton Murphy
Had a factoring client last year where this exact issue came up during due diligence for a acquisition. The buyer's lawyers found UCC filings under 4 different name variations and nobody could figure out which receivables were actually secured. Deal almost fell apart.
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Evelyn Rivera
•That's terrifying. Did they end up fixing it or walking away?
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Kolton Murphy
•We fixed it but it took weeks of UCC research and amendments. Cost everyone a fortune in legal fees.
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Julia Hall
For factoring deals I always recommend getting a professional UCC audit done before the factor commits to purchasing the receivables. Too much money at stake to mess around with name variations and imperfect security interests.
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Arjun Patel
•Good advice. We started using Certana.ai for UCC audits after getting burned on a similar deal. Their system caught name inconsistencies between our corporate charter and UCC-1 that we totally missed.
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Jade Lopez
•How often do you see factoring deals where the UCC filings are completely wrong from the start?
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Julia Hall
•More often than you'd think. Especially with smaller factors who don't have experienced UCC counsel.
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Tony Brooks
This is why I hate factoring deals. Too many moving parts and the UCC requirements are so strict. One mistake and the whole security structure falls apart.
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Ella rollingthunder87
•But when done right, factoring can be great for cash flow. Just need to be obsessive about the UCC details.
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Yara Campbell
•The problem is 'done right' requires expertise that a lot of smaller companies don't have access to.
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Isaac Wright
OP, you need to start with a clean slate. Get the official business name from your state's Secretary of State database, then review every UCC filing to make sure they all use that exact name. Any that don't match need to be terminated and refiled correctly. Don't try to patch this with amendments - it won't work for debtor name issues.
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Maya Diaz
•This is the right approach. Clean up everything now before it becomes a bigger problem.
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Tami Morgan
•Agreed. We've seen too many factoring relationships go sideways because of sloppy UCC work on the front end.
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Rami Samuels
•How long does it typically take to clean up multiple UCC filings like this?
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Haley Bennett
Whatever you do, don't let the factor keep operating with inconsistent UCC filings. If they're purchasing receivables thinking they have security and they don't, that's a recipe for legal problems down the road.
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Douglas Foster
•Absolutely. The factor needs to know their security position is compromised until this gets fixed.
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Nina Chan
•Would the factor have any recourse against whoever filed the inconsistent UCC-1s in the first place?
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Ruby Knight
Thanks everyone for the advice. Sounds like we need to stop everything and get the UCC filings cleaned up before the factoring continues. Going to run comprehensive searches under all name variations first, then work with the factor to refile everything correctly. This is going to be expensive but better than having invalid security interests.
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Diego Castillo
•Smart move. Better to spend the money now fixing it than deal with a disaster later when the security interest matters most.
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Logan Stewart
•Definitely get professional help with this. Too much at stake to DIY when you're dealing with factoring and receivables security.
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Mikayla Brown
•Keep us posted on how it goes. Always interested to hear how these UCC factoring cleanups work out.
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