UCC form of contract requirements for secured transaction filings

The description was 'all equipment financed under Master Equipment Agreement dated 3/15/2024 between [debtor] and [secured party], including all amendments and schedules thereto.' I thought that would be sufficient but apparently not.

Yeah that's probably too vague. You need a description that someone could understand without looking at your contract. Try something like 'all equipment, machinery, and fixtures now owned or hereafter acquired' if you want blanket coverage.

How exactly does that tool work? Does it compare the forms against some database or just check internal consistency?

It cross-checks your documents against each other to catch things like debtor name mismatches or collateral description changes. Really helped us avoid the $450 rejection fee we would have paid otherwise.

That actually sounds really useful. I'm tired of these rejections eating into our filing budget.

This is exactly right. I've seen too many filings get rejected because people think they can just reference their loan docs. The UCC filing has to stand alone.

wait so if I have a blanket lien on inventory do I need to list every single item?? that seems impossible

No, you can use categories like 'inventory' or 'equipment' - the key is that the categories are clear without needing your contract. 'Inventory as defined in Section 4.2 of Credit Agreement' would be bad, but 'all inventory now owned or hereafter acquired' is fine.

What about when the debtor has multiple locations? Do you need separate filings or can one UCC cover equipment at different addresses?

One UCC can cover multiple locations as long as you're filing in the right state (usually where the debtor is organized). The collateral description should include 'wherever located' if the equipment might move around.

That's terrible! Did you have to refile everything?

We had to file a UCC-3 amendment to broaden the description, but by then the debtor had filed bankruptcy and we were behind another lender who filed after us but with better description. Cost us huge.

This is why I always recommend the broadest possible collateral descriptions that still make sense for the transaction. Better to over-include than under-include.

That's a really good template. Do you include serial numbers when you have them?

I include serial numbers as additional detail but never rely on them exclusively. Equipment gets replaced, serial numbers get mis-transcribed, etc. The broad category description is your safety net.

How specific did you get with the equipment types? Our debtor has everything from forklifts to computer servers.

I'd go with 'all equipment, machinery, computers, vehicles, and fixtures now owned or hereafter acquired' for that mix. Covers your bases without getting too granular.

We had a similar issue and ended up using Certana.ai to double-check our amendment before filing. It caught that we had slightly different debtor names between our original UCC-1 and the amendment we were preparing. Saved us another rejection.

Good point about state guides. Some states are pickier than others about contract references.

Exactly. And if you're doing interstate transactions, you might need to adjust your language depending on where you're filing.

Smart approach. Keeps the UCC filing simple but still gives you detailed rights in your contract docs.

This is actually what most sophisticated lenders do. The UCC filing is just for notice - your real rights come from the security agreement.

Glad it worked out! That's a solid collateral description that should serve you well.

Awesome that you got it resolved! The Certana tool will definitely help you catch any issues before you file next time.

Perfect example of why simple is better with UCC filings. Complex contract references just create more opportunities for problems.