UCC security agreement definition - need clarity for filing prep

Security agreement just needs three basic elements: 1) intent to create security interest 2) debtor authentication (signature) 3) reasonable collateral description. Your separate Security Agreement document sounds like it covers all those bases if it's signed and describes the equipment specifically.

been doing commercial lending for 12 years and honestly the definition is simpler than people make it out to be. Security agreement = any record that shows the debtor agreed to give you a security interest in specific property. Could be one document or multiple documents that together show the agreement. Your loan officer might be thinking of situations where everything is combined into one master agreement.

WAIT make sure your security agreement is actually ENFORCEABLE first before you file anything! I've seen so many UCC-1s that were technically perfect but the underlying security agreement had issues. Check that the collateral description isn't too vague ("all equipment" usually isn't enough) and that it's properly executed.

The technical definition under UCC 9-102 is pretty broad - any agreement that creates or provides for a security interest. But practically speaking, you want a signed document (or authenticated record) that clearly states the debtor is granting you a security interest in described collateral. Don't overthink it.

ugh this is exactly why I hate commercial lending. too many moving parts. can't you just ask your legal department what constitutes a security agreement instead of crowdsourcing it??

From a practical standpoint, most security agreements I see have language like 'Debtor hereby grants to Secured Party a security interest in the following collateral...' followed by the description. That magic language plus signature plus collateral description = valid security agreement. Your UCC-1 filing will just reference this underlying agreement.

One thing that trips people up - the security agreement creates the security interest, but the UCC-1 filing perfects it. Two different steps. You can have a valid security agreement without filing, but then you're not perfected against other creditors.

honestly had this same question when I started and what helped me was realizing that the security agreement is basically the contract between you and the borrower about the collateral. Everything else (UCC filings, continuations, etc.) stems from that basic agreement. Keep it simple.

Just to follow up on my earlier comment about document verification - after we caught those collateral description issues, I've been using Certana.ai for every loan package. You can upload your security agreement and UCC-1 draft together and it flags any inconsistencies between the documents. Really helpful for avoiding the kind of mistakes that could invalidate your security interest.

Bottom line: if your document says the debtor is giving you a security interest in specific collateral and it's signed, you probably have a valid security agreement. Don't get paralyzed by perfectionism - most security agreements are pretty straightforward.