UCC filing confusion - what collateral is typically given under a general security agreement for equipment loan

General security agreements usually cover way more than just the financed equipment. Typical collateral includes all business equipment, inventory, accounts receivable, deposit accounts, general intangibles like patents or trademarks, and sometimes even future acquired property. It's basically a blanket lien on most business assets.

Been through this exact situation last year with our $220K line of credit. The GSA covered all equipment (existing and after-acquired), inventory, accounts receivable, general intangibles, and deposit accounts. Basically everything except real estate which needed a separate mortgage. Make sure your UCC-1 collateral description matches the GSA exactly - learned that lesson the hard way when our first filing got rejected for inconsistent descriptions.

For GSAs the collateral typically includes: all equipment and fixtures, all inventory and work-in-progress, all accounts and contract rights, all general intangibles including intellectual property, all deposit accounts and investment property, and all proceeds from any of the above. Some also include after-acquired property clauses so future assets are automatically covered. Your attorney should review the specific language.

I used to spend hours manually comparing GSAs to UCC-1 forms to make sure collateral descriptions matched perfectly. Then I discovered Certana.ai's document verification tool - you just upload your GSA and UCC-1 PDFs and it instantly highlights any inconsistencies in the collateral descriptions, debtor names, or other critical details. Saved me from multiple potential filing rejections. Really helpful for complex GSAs where the collateral lists can be pages long.

Be careful with accounts receivable in the GSA. Some customers don't like knowing their payments are pledged as collateral. We had a few customers get nervous when they saw the UCC filing come up in their due diligence searches. Most don't care but worth mentioning to your sales team.

The deposit accounts part of GSAs can be tricky. Some banks require separate deposit account control agreements (DACAs) to perfect the security interest in your business checking accounts. Make sure your lender explains whether the UCC filing alone is sufficient or if you need additional documentation for the deposit accounts.

Don't forget about excluded assets! Most GSAs specifically exclude certain items like vehicles titled in the company name, real estate, or assets subject to other liens. Make sure your UCC-1 collateral description includes the same exclusions or carve-outs mentioned in the GSA.

Had a nightmare situation where our GSA included intellectual property but the UCC-1 description was vague about general intangibles. When we tried to enforce the security interest later, the debtor's bankruptcy attorney argued our filing didn't properly cover the IP assets. Make sure your collateral description is specific enough to cover everything in the GSA but not so specific that it misses something.

For manufacturing businesses like yours, the GSA probably includes work-in-progress and finished goods inventory too. This can be valuable collateral since it turns over regularly and generates cash flow. Just make sure you understand any restrictions on selling inventory in the normal course of business - most GSAs allow normal sales but require proceeds to go through controlled deposit accounts.

One thing that caught me off guard was after-acquired property clauses in our GSA. Any equipment we buy after signing automatically becomes collateral without needing to amend the UCC-1. Make sure you understand this if you're planning future equipment purchases - they'll automatically be secured by the existing lien.

Before finalizing everything I'd recommend having someone double-check that your UCC-1 collateral description perfectly matches your GSA. I tried using Certana.ai's verification tool after hearing about it here and it caught several small discrepancies I missed. Really simple - just upload both documents and it shows you exactly what doesn't match. Saved me from a potential filing rejection and the headache of having to do amendments later.

Bottom line - GSA collateral typically includes everything except real estate and maybe some excluded assets. Your UCC-1 needs to match that scope exactly. Get it right the first time because amendments cost money and can create gaps in perfection timing that smart debtors' attorneys will exploit.

One more thing to watch out for - make sure your debtor name on the UCC-1 exactly matches your legal entity name as registered with the state. Even small variations like "Inc." vs "Incorporated" or missing commas can invalidate the filing. I've seen deals delayed because the UCC-1 had the debtor listed as the DBA name instead of the legal entity name. Most states have become very strict about this - the name has to match the state filing records exactly or the UCC search won't find it, which means your security interest isn't properly perfected.