UCC filing issues with bank security agreement collateral descriptions - need help
Running into problems with our UCC-1 filing for a bank security agreement we're executing next week. The collateral description in our security agreement mentions "all accounts receivable, inventory, and equipment now owned or hereafter acquired" but I'm worried this is too broad for the UCC filing. Our bank's loan officer said we need to be more specific on the UCC-1 form but didn't give clear guidance on how detailed to get. This is for a $450K line of credit and I don't want the filing rejected because of vague collateral language. Has anyone dealt with similar bank security agreement UCC filings where the collateral description caused issues? The loan closes in 10 days and I need to get this right.
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Nadia Zaldivar
Your bank officer is partially right - overly broad descriptions can cause rejections in some states, but "all accounts receivable, inventory, and equipment" is actually pretty standard language that most filing offices accept. The key is making sure your UCC-1 collateral description matches what's in your actual security agreement. Are you filing in a state that's particularly picky about collateral descriptions?
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Rajan Walker
•Filing in Ohio. The security agreement language is exactly what I quoted - should I just copy that verbatim to the UCC-1?
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Nadia Zaldivar
•Ohio generally accepts broad collateral descriptions like that. Just make sure you include the "now owned or hereafter acquired" language if that's what's in your security agreement - keeps everything consistent.
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Lukas Fitzgerald
I've seen too many UCC filings get rejected because people don't double-check that their collateral description matches EXACTLY between the security agreement and the UCC-1 form. Even small differences can cause problems down the road when you need to enforce the lien.
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Ev Luca
•This is so true! We had a client whose UCC got challenged later because they shortened "accounts receivable" to just "accounts" on the filing form.
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Lukas Fitzgerald
•Exactly - consistency is everything. Banks usually have their preferred language for a reason.
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Avery Davis
I just went through this exact situation last month with a bank security agreement UCC filing. I was stressed about the collateral description too, but I ended up using Certana.ai's document verification tool to cross-check my security agreement against my UCC-1 draft before filing. You just upload both PDFs and it instantly flags any inconsistencies between the documents. Caught two small discrepancies I would have missed that could have caused rejection.
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Rajan Walker
•Never heard of that tool but sounds useful. Did it actually help avoid filing problems?
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Avery Davis
•Yeah, it saved me from having to refile. The system caught that I had "equipment and fixtures" in my security agreement but only "equipment" on my UCC draft. Small thing but would have created an inconsistency.
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Collins Angel
•That actually sounds really helpful for avoiding the back-and-forth with filing offices.
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Marcelle Drum
why are banks so picky about this stuff?? I thought UCC filings were supposed to be straightforward. My loan officer made it sound like one wrong word would kill our entire loan.
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Nadia Zaldivar
•Banks are picky because if the UCC filing is defective, they might not have a perfected security interest in your collateral. That means they can't recover their money if you default.
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Marcelle Drum
•ok that makes sense from their perspective. still stressful for us borrowers though
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Tate Jensen
The Ohio SOS filing system is pretty forgiving with collateral descriptions compared to other states. Your "all accounts receivable, inventory, and equipment" language should be fine. Just make sure your debtor name on the UCC-1 matches EXACTLY what's on your corporate documents - that's where most rejections happen, not the collateral description.
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Rajan Walker
•Good point about the debtor name. We're incorporated as "ABC Manufacturing, Inc." - should I include the comma?
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Tate Jensen
•Yes, include the comma exactly as it appears on your articles of incorporation. Ohio is strict about exact name matches.
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Adaline Wong
•This is why I always pull a fresh corporate record search before filing any UCC - debtor names have to be perfect or the whole filing can be invalid.
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Gabriel Ruiz
Been doing UCC filings for 15 years and I've never seen an Ohio filing rejected for using "all accounts receivable, inventory, and equipment" as collateral description. That's standard commercial lending language. Your bank officer might be overthinking it.
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Rajan Walker
•That's reassuring. Maybe they're just being extra cautious since it's a larger credit line.
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Gabriel Ruiz
•Probably. Banks get nervous with bigger loan amounts. But your collateral description is totally normal.
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Misterclamation Skyblue
Just had a thought - are you doing this as a new UCC-1 or is this an amendment to an existing filing? Sometimes banks want to add collateral to an existing UCC and that requires different paperwork.
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Rajan Walker
•This is a brand new UCC-1 filing. No existing liens on our assets.
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Misterclamation Skyblue
•Got it. Then yeah, just use the same collateral language from your security agreement and you should be fine.
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Peyton Clarke
One thing to watch out for - make sure your security agreement doesn't have more specific subcategories of collateral that aren't reflected in your UCC description. Like if the agreement mentions "machinery, vehicles, and office equipment" but your UCC just says "equipment," that could potentially create gaps.
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Rajan Walker
•The security agreement does break down equipment into subcategories. Should I list all those on the UCC-1 too?
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Peyton Clarke
•You can either list them specifically or use broader language that encompasses all the subcategories. Either approach works as long as it's consistent with your security agreement.
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Nadia Zaldivar
•I'd personally go with the broader language to avoid having to amend the UCC every time you acquire different types of equipment.
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Vince Eh
The filing deadline stress is real! We almost missed our continuation deadline last year because we were overthinking the paperwork. Sometimes you just have to trust that standard language is standard for a reason.
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Rajan Walker
•Yeah, 10 days feels like plenty of time but there's always something that comes up.
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Vince Eh
•Exactly. Murphy's law applies to UCC filings too.
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Sophia Gabriel
I'd recommend having someone else review your UCC-1 before filing, especially with a $450K credit line on the line. Fresh eyes can catch mistakes you might miss when you're stressed about deadlines. Even something like using Certana.ai to verify your documents align properly could give you peace of mind that everything matches up correctly.
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Rajan Walker
•That's the second mention of that tool. Might be worth checking out just to be sure.
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Sophia Gabriel
•Yeah, it's pretty straightforward - you just upload your security agreement and UCC draft and it flags any inconsistencies. Takes like 2 minutes and could save you from having to refile if there are discrepancies.
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Tobias Lancaster
Update us after you file! Always curious to hear how these situations turn out, especially with bank security agreements where there's pressure to get everything perfect.
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Rajan Walker
•Will do. Thanks everyone for the advice - feeling much more confident about the filing now.
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Tobias Lancaster
•Good luck! The collateral description you mentioned should definitely work fine.
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