UCC filing for cash security agreement - debtor name complications

This is exactly right. I learned this the hard way when a filing got rejected because I used the DBA instead of the legal entity name. The SOS systems are very strict about exact name matches.

But what if the loan documents are all signed under the other name? Wouldn't that create a mismatch between the loan and the UCC filing?

That's my concern - the loan docs reference ABC Construction LLC but the legal entity is ABC Construction Holdings LLC. Should I amend the loan first or can I file the UCC with the legal name and explain the discrepancy?

File with the legal entity name. The UCC system doesn't care what your loan documents say - it only cares about the debtor's actual legal name per state records.

Wait, that seems risky. If the loan docs and UCC don't match, how do you prove the security interest attaches to the right entity?

That sounds helpful. Does it check against actual state records or just compare the documents you upload?

It does a cross-check between documents you upload - so you'd upload the articles of incorporation and your draft UCC-1 and it flags any name mismatches. Really helpful for catching those small spelling differences that cause rejections.

Never heard of this but honestly anything that prevents UCC rejections is worth trying. The refiling process is such a pain.

Good idea. I'll check both names in the UCC database. If other lenders are consistently using one name over the other, that might indicate the safer choice.

Just remember that other lenders might have made the same mistake you're trying to avoid. Always go back to the Secretary of State records as the authoritative source.

Tell me about it! And then when the filing gets rejected, the client acts like it's your fault for not being psychic about their corporate structure.

At least with cash collateral you don't have to worry about detailed collateral descriptions. Silver lining I guess?

Yes, we have the DACA in place with the bank. The UCC filing is more for notice purposes and to perfect our security interest in the cash collateral.

Perfect. Then you're covered on the control side. Just get that debtor name right and you should be good to go.

What's a DACA? Sorry, still learning all these acronyms...

That's probably the safest approach. I'll have our counsel confirm which entity name should be used and whether we need to amend any loan documents.

Smart move. On deals this size, the legal review cost is nothing compared to the potential issues if you get it wrong.

Does it work with all state filing systems or just certain ones?

It's document-based verification so it works regardless of which state you're filing in. It's comparing the names and details in your actual documents rather than checking state databases.

It's cash collateral for the full loan amount. The description will be pretty straightforward - just the cash security agreement and related deposit accounts.

Good, that keeps the collateral description simple. Now you just need to nail down that debtor name and you're set.

Way easier than trying to describe complex equipment or inventory as collateral!

Thanks everyone. I think this is the right approach. I'll verify the exact legal name with the Secretary of State and file accordingly. Really appreciate all the input on this.

Good luck with the filing! Cash collateral deals are usually pretty clean once you get the names sorted out.

Hope it goes smoothly. Keep us posted if you run into any other issues with the filing.