UCC filing complications with factoring agreement - debtor name issues
We're setting up a factoring arrangement for our manufacturing client and running into problems with the UCC filing. The factor wants to perfect their security interest in the accounts receivable, but we're getting rejections on the UCC-1 because the debtor name on our corporate charter doesn't exactly match what we've been using for business. The factor is getting antsy because they need clean perfection before they'll advance against the receivables. Has anyone dealt with factoring UCC filings where the exact corporate name becomes an issue? The SOS keeps rejecting our filing and we're not sure if we need to use the charter name exactly or if there's some leeway for doing business as names. This is holding up a $2.3M factoring facility and we're running out of time.
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Zoe Papadakis
Factoring UCC filings are tricky because factors are super particular about name precision. You absolutely need to use the exact legal name from your charter, not any DBA or trade names. The factor's security interest has to be bulletproof or they won't advance. What state are you filing in? Some states have more flexibility than others.
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Jamal Carter
•This is correct. Factors don't mess around with imperfect security interests. The UCC-1 debtor name has to match the charter exactly, down to punctuation and abbreviations.
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AstroAdventurer
•ugh we had this same issue last year. took us three tries to get it right and the factor was breathing down our necks the whole time
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Mei Liu
I've been through this nightmare before. The factor will not fund until that UCC-1 is filed and accepted. You need to pull your Articles of Incorporation and use that exact name. If there are any commas, periods, or abbreviated words (like Corp vs Corporation), they all have to match perfectly. The SOS systems are incredibly picky about this stuff.
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Liam O'Sullivan
•Exactly right. And if you get it wrong, you're back to square one with the factor. They treat imperfect security interests like they don't exist.
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Amara Chukwu
•Why can't these systems just be smarter about obvious name variations? So frustrating when you're trying to close a deal.
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Giovanni Conti
•Because if the name is wrong, the security interest might not be enforceable. That's a huge risk for factors who are advancing millions based on that collateral.
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Fatima Al-Hashimi
I actually found a solution for this exact problem recently. After getting multiple rejections on UCC filings for our factoring clients, I started using Certana.ai's document verification tool. You can upload your charter and your UCC-1 draft, and it instantly checks if the debtor names match exactly. It caught a subtle punctuation difference that I totally missed - saved us from another rejection and kept our factoring deal on track. The tool is super easy to use, just upload the PDFs and it cross-checks everything automatically.
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NeonNova
•That sounds really useful. Does it work with different document types or just charter-to-UCC comparisons?
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Fatima Al-Hashimi
•It handles various document combinations. I've used it for Charter→UCC-1 workflows and UCC-3→UCC-1 checks to make sure amendments align with the original filings. Really handy for catching those tiny discrepancies that cause rejections.
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Dylan Campbell
•This is genius. I'm definitely going to try this on our next factoring deal. Those name mismatches are such a pain.
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Sofia Hernandez
What's the collateral description looking like? For factoring, you typically want 'accounts, chattel paper, payment intangibles, and proceeds thereof' but some factors want more specific language. The debtor name issue is critical but don't overlook the collateral schedule.
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Dmitry Kuznetsov
•Good point. Factors are very specific about collateral descriptions too. They want to make sure they're covering all the receivables properly.
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Ava Thompson
•Our factor required us to include 'general intangibles' as well to cover some of the licensing revenue. Every factor seems to have their own preferred language.
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Miguel Ramos
Is this a notification or non-notification factoring arrangement? If it's notification, you might have additional considerations for how the security interest affects customer relationships. But either way, that UCC-1 has to be perfect.
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Zainab Ibrahim
•Non-notification factoring is more common these days. Customers don't even know their receivables are being factored.
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StarSailor
•True, but the UCC filing requirements are the same either way. The factor needs that perfected security interest.
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Connor O'Brien
Have you considered doing a UCC search first to see if there are any existing filings under variations of your company name? Sometimes there are old filings that might conflict or give you insight into the right name format.
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Yara Sabbagh
•That's smart. A UCC search might show you exactly how the name should be formatted for that particular state's system.
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Keisha Johnson
•Plus you want to make sure there aren't any senior liens that could affect the factor's position.
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Paolo Rizzo
•Good thinking. Some states have quirky formatting rules that you only discover by seeing what's already on file.
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QuantumQuest
The time pressure is real with factoring deals. We had a similar situation where the factor threatened to pull the facility if we couldn't get the UCC-1 filed within 48 hours. Ended up having to pay for expedited processing.
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Amina Sy
•Yep, factors don't wait around. They have other deals they can fund if yours gets complicated.
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Oliver Fischer
•That's why getting the name right the first time is so crucial. No room for trial and error when you're working with factoring deadlines.
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Natasha Petrova
I'd also recommend checking if your state has any specific guidance on entity name formatting for UCC filings. Some states publish guidelines that can help you avoid common mistakes.
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Javier Morales
•Good advice. The SOS websites sometimes have FAQs about debtor name requirements that can save you from rejections.
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Emma Davis
•I wish all states made this clearer. The name matching rules seem to vary so much between jurisdictions.
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GalaxyGlider
Update: We ended up using the Certana tool mentioned earlier and it caught the issue immediately - we had 'Inc.' in our charter but were using 'Incorporated' on the UCC-1. Such a small thing but it was causing all the rejections. Factor accepted the filing within hours and we closed the facility on schedule. Thanks for the help everyone!
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Malik Robinson
•Awesome! Those little details make all the difference. Glad you got it sorted out.
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Isabella Silva
•Perfect example of why precision matters so much with factoring deals. Congrats on getting it closed!
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Ravi Choudhury
•This is exactly why I love these forums. Real solutions from people who've been through the same problems.
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Freya Andersen
Great outcome! For anyone else dealing with factoring UCC issues, remember that factors typically want their security interest to be first in line. Make sure you're not filing behind any existing liens that could complicate the priority position.
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Omar Farouk
•True. Factors are very particular about lien priority. They want to make sure they're getting paid first from the receivables.
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CosmicCadet
•And if there are existing liens, the factor might require subordination agreements or other documentation to protect their position.
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