UCC filing confusion - does the UCC apply to loans or just equipment deals?

This is exactly right. I've been doing commercial lending for 15 years and the collateral determines everything. Equipment loans, working capital lines secured by inventory or A/R, even some SBA deals - if it's personal property collateral, you're in UCC territory.

Wait, so even a regular business line of credit needs UCC filing if it's secured by business assets? I thought UCC was just for equipment finance companies.

Ugh yes, the bankruptcy nightmare scenario. I had a deal where we thought we were secured by real estate but there was also equipment involved that we didn't file on. When the business went under, the trustee challenged our security interest in that equipment. Expensive lesson.

How do you guys keep track of which deals need UCC vs which don't? We're processing like 20-30 loans a month and I feel like I'm always second-guessing myself on the filing requirements.

I use a simple checklist - if ANY part of the collateral is personal property (not real estate), I file a UCC-1. Better safe than sorry, and the filing fee is nothing compared to losing your security interest.

That sounds really helpful! I'm constantly worried about getting the debtor names wrong between the loan agreement and the UCC-1. How accurate is the name matching?

Super accurate in my experience. It checks entity names against your loan docs and flags any inconsistencies. Much better than trying to manually compare documents, especially when you're dealing with LLCs that have slightly different name formats across different paperwork.

I need to check this out. I had a filing rejected last month because the debtor's legal name on the UCC didn't exactly match what was on their articles of incorporation. Such a headache to refile and deal with the timing gap.

That's a great way to think about it. I was getting confused because some of our loans are secured by both real estate AND equipment, so I wasn't sure if I needed to file UCCs for the mixed collateral deals.

Exactly - mixed collateral deals need both. Mortgage for the real estate, UCC-1 for the personal property. You're creating multiple security interests to cover all your collateral bases.

OMG yes! I almost let a continuation lapse on a major credit line. Had to scramble to get the UCC-3 filed before the 5-year anniversary. Now I calendar all my continuation dates as soon as I file the original UCC-1.

Same here. I use a spreadsheet to track all my UCC filings with the 5-year anniversary dates highlighted. Too easy to forget about continuations until it's too late.

This is why I love that Certana tool someone mentioned earlier - it can also check your UCC-3 continuation forms against the original UCC-1 to make sure all the details match correctly. Saves so much time vs manually comparing filing numbers and debtor names.

No UCC filing needed for unsecured loans - there's no collateral to perfect a security interest in. UCC only applies when you're taking a security interest in personal property.

Right, unsecured means no collateral, so no UCC. Though sometimes borrowers will offer to pledge assets later if they get into trouble, and THEN you'd need to file a UCC to perfect that new security interest.

This distinction took me forever to understand when I started in lending. I kept thinking bigger loans = more filings, but it's really all about what you're secured by.

Exactly. And don't forget that some states have different rules for certain types of collateral. Motor vehicles often need titles instead of or in addition to UCC filings, depending on your state.

Yes! I learned this lesson when we made a loan secured by equipment that already had a senior lien from another bank. Our security interest was worthless because we were in second position behind their perfected filing.

UCC searches are so important. I always run them as part of my loan approval process. You'd be amazed how many borrowers 'forget' to mention existing liens on their collateral.

I've started using Certana for this too - their search feature pulls UCC records and can cross-reference against your proposed collateral. Much faster than manually searching state databases.

Thanks everyone! This has been incredibly helpful. Sounds like I need to shift my thinking from 'what type of loan' to 'what type of collateral' when deciding on UCC filings. Going to implement a better tracking system for continuations too.

You've got it! And don't hesitate to ask questions - UCC law can be tricky and the stakes are high if you get it wrong. Better to over-file than under-file in most cases.

Great question! For revolving collateral like inventory, your original UCC-1 filing with a general description of "inventory" typically covers the changing pool - you don't need to file amendments every time inventory turns over. That's actually one of the key benefits of UCC filings for working capital facilities. The original filing creates what's called a "floating lien" that automatically attaches to new inventory as it's acquired. Just make sure your security agreement language is broad enough to cover "all inventory now owned or hereafter acquired" or similar language. You'd only need amendments if you're adding completely new types of collateral categories (like going from inventory-only to inventory + equipment).