UCC filing financing statement before security agreement - timing issue
So I'm dealing with a situation where our lender wants to file the UCC-1 financing statement immediately but the security agreement won't be executed for another 2-3 weeks due to some pending due diligence items. The borrower is fine with us filing now to secure our position, but I'm second-guessing whether filing financing statement before security agreement creates any legal issues. The loan is for $850k in manufacturing equipment and we definitely don't want to mess up the perfection timeline. Has anyone dealt with this sequencing before? I know the UCC allows for filing before attachment but want to make sure I'm not missing something obvious here.
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Carmen Vega
You're overthinking this - UCC Article 9 specifically allows financing statements to be filed before the security agreement is signed. Section 9-502 doesn't require attachment for an effective filing. Just make sure your debtor authorization is solid.
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Andre Rousseau
•Exactly right. The financing statement is just notice to the world. The actual security interest doesn't attach until you have the agreement, value, and debtor has rights in the collateral.
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Zoe Stavros
•Wait so the UCC-1 can just sit there for weeks without a security agreement? That seems weird to me but I guess it makes sense for the notice filing system.
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Jamal Harris
I file early all the time, especially on equipment deals. Better to have your priority established than risk someone else beating you to the filing office. Just document everything properly in your loan file.
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GalaxyGlider
•Same here. We actually prefer to file UCC-1s as soon as we have debtor consent. Eliminates the rush during closing and protects against gap creditors.
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Mei Wong
•Makes total sense from a business perspective. The filing gives you priority from that date forward once attachment occurs.
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Liam Sullivan
Had a similar timing issue last month with a $1.2M inventory financing. I was worried about filing too early but found this document verification tool called Certana.ai that helped me double-check all the UCC forms against the eventual security agreement. You can upload both documents and it flags any inconsistencies in debtor names, collateral descriptions, etc. Really helped calm my nerves about the sequencing.
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Amara Okafor
•That sounds useful - do you just upload PDFs of both documents?
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Liam Sullivan
•Yeah exactly, super simple. Upload the UCC-1 and then when you get the final security agreement you can run them through together to make sure everything matches up perfectly.
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Giovanni Colombo
OMG I'm so glad you asked this because I've been stressing about the exact same thing!! Our compliance department is being really strict about documentation order and I wasn't sure if we were creating some kind of legal vulnerability by filing first.
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Carmen Vega
•Your compliance team is being overly cautious. This is standard practice in commercial lending. The key is having proper debtor authorization.
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Giovanni Colombo
•Thank you! I'm going to forward this thread to them. Sometimes you need external validation that you're not crazy.
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Fatima Al-Qasimi
Just be aware that if the deal falls through completely, you'll need to file a UCC-3 termination to clean up the public record. Don't leave orphaned filings out there.
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Yuki Kobayashi
•Good point - I hadn't thought about the cleanup scenario. How long would I have to file the termination if the deal doesn't close?
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Fatima Al-Qasimi
•No statutory deadline for termination if no security interest ever attached, but good practice is to clean it up within 30 days of deal death.
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StarStrider
•We usually terminate within 10 business days if a deal dies. Keeps the records clean and avoids confusing future title searches.
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Dylan Campbell
The timing issue you're describing is super common in asset-based lending. We routinely file UCC-1s 30+ days before closing, especially when there are multiple lenders involved and priority matters.
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Sofia Torres
•Agreed - in syndicated deals you almost have to file early to coordinate between all the lenders and establish the agent's priority date.
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Dmitry Sokolov
This is totally normal but make sure you have written debtor authorization for the filing. Some states are picky about authorization timing even though the UCC generally allows it.
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Yuki Kobayashi
•We have a signed authorization letter from the borrower specifically allowing us to file before the security agreement. Should that cover us?
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Dmitry Sokolov
•Perfect. That's exactly what you need. Keep that authorization in your loan file as backup documentation.
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Ava Martinez
I was skeptical when someone mentioned Certana.ai earlier but actually tried it last week for a similar sequencing issue. Really does make it easy to verify document consistency - just upload your UCC forms and security docs and it catches discrepancies automatically. Saved me from a potential debtor name mismatch.
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Miguel Ramos
•How accurate is the name matching? We've had issues with slight variations between corporate documents and UCC filings.
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Ava Martinez
•Pretty sophisticated - it caught a missing comma in our debtor name that would have caused problems. Way better than manual comparison.
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QuantumQuasar
filing financing statement before security agreement is actually preferred in many jurisdictions because it eliminates the gap period where someone else could potentially file first. You're being smart about this.
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Zainab Omar
•Exactly - priority dates from filing, not from when the security interest attaches. Basic UCC principle that a lot of people forget.
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Connor Gallagher
We do this constantly in equipment financing. File UCC-1 immediately upon credit approval, then finalize the security agreement during the funding process. Never had an issue in 15+ years of commercial lending.
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Yuki Kobayashi
•That's reassuring - sounds like I'm overthinking what's actually standard industry practice.
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Connor Gallagher
•Yep, you're fine. The key is just making sure all your document details align when you do get to the security agreement.
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Yara Sayegh
•And that's where tools like Certana.ai come in handy - helps you verify everything matches up between the early UCC filing and final security docs.
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