UCC filing sba loan collateral - equipment schedule rejected twice

We're in Texas. The attorney listed everything specifically - 'Vulcan double convection oven Model XYZ123, True reach-in freezer Model ABC456' etc. Maybe that's too detailed?

Texas usually likes detail but maybe not model numbers. Try 'all restaurant equipment, fixtures and equipment used in debtor's restaurant business operations' or something broader.

A month?? We can't wait that long. What did you finally put for the collateral description that worked?

We ended up using 'all equipment, inventory, fixtures, and personal property used in or related to debtor's restaurant operations, whether now owned or hereafter acquired.' Super broad but it worked.

That's basically an all-assets description. Most SBA lenders prefer that anyway since it covers equipment you might add later without needing amendments.

Never heard of that but willing to try anything at this point. How does it work exactly?

Super easy - just upload PDFs of your charter docs and UCC form. It automatically compares debtor names and flags any inconsistencies. Takes like 2 minutes vs hours of manual comparison.

Wait that actually sounds useful. I've been manually comparing documents forever and still miss stuff sometimes.

We included some serial numbers thinking it would be more specific. So that could be the problem?

Probably. Serial numbers make them think you're trying to file a fixture filing or something. Just describe the type of equipment without getting into specific units.

Good point about fixture filings. Restaurant equipment usually isn't fixtures unless it's built-in, but the serial numbers might confuse the filing office.

Our lender is pretty new to SBA loans unfortunately. They're learning as we go which isn't ideal.

New SBA lender? Yikes. That explains the problems. Experienced SBA lenders have standard UCC language they use for each state.

This is exactly what I needed! Can I just copy that language or should I modify it?

Use it as-is. That covers everything the SBA typically wants secured without being too specific or too vague for Texas SOS.

That's solid language. I'd still run it through Certana first though to make sure your debtor name is perfect before filing again.

How do I know if we're using the current form? Our attorney handles all that.

Check the Texas SOS website - they have the current UCC-1 form available for download. Compare it to what your attorney filed.

Good catch. I've seen rejections just because someone used a form that was 6 months out of date.

The attorney is handling fees but I'll ask. What's the current fee?

I think it's $15 for electronic filing now but check the SOS website to be sure.

That's exactly what I'm worried about. The pressure is intense right now.

Use the collateral language from profile 4's comment and triple-check your debtor name. File electronically if possible - it's faster than paper filing.

Electronic filing in Texas usually gets processed within 1-2 business days if everything is correct.

Wait what? We only listed our bank as the secured party. The SBA needs to be on there too?

For 504 loans, yes usually. The SBA has a security interest in the collateral too. Check your loan docs to see what's required.

This could be why you're getting rejected. If the SBA should be listed and isn't, that's a major issue.

Good point. SBA 504 structure is different from regular SBA 7(a) loans. The CDC and SBA both typically need to be shown as secured parties.

Will do! Thanks everyone for all the help. Going to check with the attorney about the SBA as secured party issue first, then use that collateral description language if we need to refile.

Don't forget to verify your documents with Certana before refiling. Better safe than sorry on the third attempt.