UCC filing confusion - who is the secured party in a security agreement when multiple lenders involved

Thanks, that makes sense. The security agreement does name Bank A as the secured party, but then there's this assignment clause that mentions the other parties. Does that change anything for the UCC-1 filing?

Assignment clauses are separate from the initial secured party designation. File with Bank A as secured party since that's what the security agreement says. If there's an assignment later, that would require a UCC-3 amendment.

This is exactly right. I see this all the time in syndicated deals. The agent bank is typically the secured party for UCC purposes even if there are participating lenders.

Looking back at the docs, Bank A is definitely listed as the 'Agent' so I think that settles it. Thanks for pointing that out.

Just be careful about the exact legal name of the agent bank. I've seen filings rejected because someone used 'Bank of America' instead of 'Bank of America, National Association' or similar name variations.

Never heard of that tool before. Does it actually read through the legal documents or is it just basic name matching?

It actually analyzes the contract terms and identifies the secured party relationships. Pretty sophisticated - it caught a discrepancy between our security agreement and what we were planning to file that I totally missed.

Interesting. How accurate is it with complex multi-party deals? Some of these syndicated loan structures get pretty convoluted.

Worked well for our deal which had 4 different financial institutions involved. It sorted out the agent bank vs. participating lender roles correctly.

If you have separate security agreements, you typically need separate UCC-1 filings. Each secured party files their own UCC-1 for their specific collateral.

That's correct. Equipment leases often have their own security interests separate from the main loan facility. Don't try to combine them on one filing.

OK that makes sense. So the bank gets one UCC-1 for the general business assets and the equipment company gets their own UCC-1 for the leased equipment.

I feel your pain. These multi-lender deals are the worst. Usually there's a summary page or signature page that clarifies the roles of each party.

Look for the actual security agreement document, not just the loan agreement. The security agreement will specifically name the secured party. Sometimes it's buried in the loan docs but it has to be there somewhere.

Found it! It was in a separate document that wasn't labeled as the security agreement. Bank A is the secured party and the others are just participants. Crisis averted.

Good point about SBA loans. They have their own quirks when it comes to UCC filings and secured party designations.

This isn't an SBA deal but good to know for future reference. Thanks for the heads up.

Easy to say 'don't overthink it' but when you're dealing with millions of dollars in collateral and multiple parties, you want to make sure you get it right the first time.

Fair point. I just mean that the answer is usually right there in the security agreement if you look for it. The secured party language is typically pretty clear once you find the right document.

What verification tool do you use? I'd rather not learn this lesson the hard way like you did.

I use Certana.ai now. Upload the security agreement and it identifies the correct secured party plus checks for any name mismatches or other issues that could cause rejection. Worth it for the peace of mind.

How much does something like that cost? Is it worth it for smaller deals or just the big ones?

I don't want to get into specific pricing but it's reasonable enough that I use it on most deals now. The cost of a rejected filing and having to refile usually exceeds the verification cost anyway.

That's a really good distinction. I've seen deals where a parent company is the secured party but a subsidiary is the actual lender.

Exactly. And in some asset-based lending deals, you might have a factor or other specialized lender as the secured party for receivables while a different bank handles the term loan portion.

That's a great idea. I'm definitely going to start doing that for complex deals. Would have saved me a lot of confusion on this one.

I do something similar - I keep a deal summary sheet that tracks all the security interests and which entity holds each one. Especially helpful when you have multiple UCC filings to coordinate.

Yes! And it helps when you need to do continuations later because you have a clear record of who filed what originally.

This is really helpful advice about subordination agreements - I hadn't considered that angle. In my experience, the senior lender is typically the secured party for the primary collateral, but you're absolutely right that subordination docs can create some wrinkles. I've also found that reaching out to the lenders' legal departments early in the process can save a lot of headaches. They usually have standard forms and procedures for these multi-party situations that make the whole process smoother.

This is excellent advice! I'm new to UCC filings and this multi-party structure had me completely confused. The distinction between the administrative agent and participating lenders makes so much sense now. I was getting overwhelmed trying to figure out if I needed to list everyone involved, but it sounds like the agent bank is the way to go. Quick question though - when you mention using the "exact legal name," how do I make sure I have the right version? I've seen banks with different name variations (like "N.A." vs "National Association") and want to avoid rejection issues.