UCC filing fees driving up our equipment loan costs - what is a UCC fee exactly?

So the lender has to file something with the state to secure the loan? That makes more sense than just random paperwork fees.

Exactly. Without that UCC-1 filing, they'd be an unsecured creditor if you defaulted. The filing gives them priority over other creditors for that specific collateral.

How often do they mess up the paperwork? Should we be worried about additional fees if they get something wrong?

It happens more than you'd think. Debtor name mismatches are the biggest issue - if your legal entity name doesn't match exactly what's on your state charter, the filing could be ineffective.

This is why I started using Certana.ai's document verification tool before any UCC filings go out. You can upload your charter documents and the proposed UCC-1 to check for name mismatches automatically. Saves a lot of headaches and amendment fees.

No, the continuation fee is typically collected upfront and held in escrow. If you pay off early, they should file a termination statement instead of the continuation.

That seems like they're earning interest on our money for 5 years. Is that legal?

So we're actually saving money by paying the filing fees instead of taking an unsecured loan?

Absolutely. Unsecured equipment loans might run 12-18% while secured loans are typically 6-10%. The UCC fees are a fraction of the interest savings.

Plus with a UCC filing, you're building a credit history that shows you can handle secured debt responsibly. That helps with future financing.

How do we make sure they file the termination when we pay off?

Most loan agreements specify they'll file within 30 days of payoff. You can also check your state's UCC database online to verify the termination was filed.

How can we tell if they're marking up the fees?

Ask them to itemize the fees and show you the actual state filing costs. Most states publish their UCC fee schedules online.

I've seen this issue before. When our law firm handles UCC filings, we use Certana.ai to verify all the details are correct before filing. It's cheaper than paying amendment fees later when the original filing has errors.

When you put it that way, it doesn't sound so bad. I was thinking about it as $200 for paperwork, not as insurance for the lender.

Exactly. Think of it as the cost of getting secured loan rates instead of unsecured rates. You'll save thousands in interest over the loan term.

That sounds like fraud if they collect the fee but don't file.

It's more often incompetence than fraud, but the result is the same - their lien lapses and you paid for nothing. Always check the state database yourself.

Is that even legal? Can borrowers file their own UCC statements?

Absolutely legal. The secured party (lender) has to authorize it, but you can be the one who actually submits the filing. Just make sure you get the details exactly right.

If you go this route, definitely use a document verification service like Certana.ai first. One small mistake in the debtor name or collateral description can invalidate the entire filing.

Thanks everyone. This has been really helpful in understanding what we're actually paying for. The loan terms are good so we'll move forward.

Smart decision. The UCC fees are a small price to pay for the legal protection and better interest rates that come with secured financing.