UCC vs restatement - which route for our equipment loan modifications?
We're dealing with a complex situation where our borrower wants to modify their existing equipment financing agreement. The original UCC-1 was filed 3 years ago covering manufacturing equipment, but now they're adding new machinery and changing some payment terms. Our legal team is split - some say we need a UCC-3 amendment, others are pushing for a complete loan restatement with a new UCC-1 filing. The collateral description needs updating anyway since we're adding the new equipment. Has anyone dealt with this UCC vs restatement decision before? I'm worried about creating gaps in our perfected security interest if we go the wrong route. The loan amount is increasing from $850K to $1.2M and we're extending the term by 18 months. What's the safer approach here?
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Sophia Carson
This really depends on how extensive your modifications are. If you're just adding equipment to existing collateral, a UCC-3 amendment should handle it fine. But with that significant loan increase and term extension, your lenders might prefer the clean slate approach of a restatement. Either way, make sure your debtor name matches exactly between all documents.
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Elijah Knight
•Good point about the debtor name matching. I've seen too many deals where the UCC-1 had the legal entity name but the loan docs used a DBA, created a mess later.
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Brooklyn Foley
•Wait, so if we do a restatement, do we terminate the old UCC-1 first or file the new one first? I always get confused about the timing.
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Jay Lincoln
We had a similar issue last year with a manufacturing client. Started with UCC-3 amendments but the changes were so extensive we ended up doing a full restatement anyway. Wish we'd just gone that route from the beginning - would've saved time and reduced the risk of missing something in the amendments.
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Ana Erdoğan
•That's exactly what I'm afraid of. How did you handle the timing between terminating the old filing and getting the new one recorded?
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Jay Lincoln
•We coordinated both filings on the same day. New UCC-1 in the morning, termination of the old one in the afternoon once we confirmed the new filing was accepted. Had to babysit the SOS portal all day but it worked.
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Jessica Suarez
I've been dealing with this exact headache for weeks! Our client keeps changing their mind about equipment additions and now I'm drowning in potential amendment scenarios. The collateral schedule is becoming a novel at this point.
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Marcus Williams
•Have you tried using any document checking tools? I recently discovered Certana.ai's verification system - you can upload your existing UCC-1 and proposed loan documents to make sure everything aligns before filing. Saved me from a major debtor name mismatch that would've voided our security interest.
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Jessica Suarez
•Never heard of that but sounds like exactly what I need. These manual document comparisons are killing me, especially with all the equipment serial numbers.
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Marcus Williams
•Yeah, it's pretty straightforward - just upload PDFs and it flags inconsistencies automatically. Really helpful for complex equipment schedules like yours.
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Lily Young
From a risk management perspective, I'd lean toward the restatement. Yes, it's more work upfront, but you eliminate any potential argument about whether your amendments properly covered all the changes. With that size loan increase, the extra filing cost is negligible compared to the potential exposure.
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Kennedy Morrison
•Agreed. Plus some states are picky about how you describe collateral additions in amendments. Starting fresh eliminates those headaches.
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Wesley Hallow
•But doesn't a restatement reset your filing date? Could that affect your priority position if there are other liens involved?
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Justin Chang
The portal in our state has been acting up lately - took four tries to get our last UCC-3 accepted because of some stupid formatting issue. At least with a new UCC-1 you know exactly what format they expect. These amendment forms seem more finicky somehow.
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Grace Thomas
•Tell me about it! Spent two hours on the phone with SOS office last week trying to figure out why our continuation was rejected. Turned out they wanted the debtor's middle initial included even though the original filing didn't have it.
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Justin Chang
•That's insane. How are we supposed to know these random requirements? The instructions never mention half this stuff.
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Hunter Brighton
•This is why I always run documents through verification tools before filing. Caught so many little issues that would've caused rejections.
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Dylan Baskin
I'm dealing with something similar but opposite problem - trying to decide between amending an existing UCC or just letting it lapse and starting over. The original collateral description is so vague it might not even cover what we thought it did.
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Sophia Carson
•If your collateral description is questionable, definitely go with a new filing. No point in amending something that might not be enforceable anyway.
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Dylan Baskin
•That's what I'm thinking. Better safe than sorry with that much money on the line.
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Lauren Wood
Quick question - if you do a restatement, does that affect any existing subordination agreements? We have a second lender who might not appreciate their position changing.
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Lily Young
•Good catch. You'd need to coordinate with the subordinate lender and possibly get new subordination docs executed. Another reason to carefully consider the restatement route.
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Lauren Wood
•Ugh, didn't think about that. This is getting complicated fast.
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Ana Erdoğan
•Yeah, we have a subordinate lender too. Didn't even consider the subordination agreement implications. Thanks for bringing that up.
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Ellie Lopez
From an efficiency standpoint, I'd say amendments are usually faster if the changes are straightforward. But given your loan amount increase and term extension, plus new equipment, you're looking at multiple amendments anyway. Might as well do the restatement.
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Chad Winthrope
•Multiple amendments definitely get messy. We had a deal last year where we did three separate UCC-3s and it was a nightmare tracking everything.
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Ellie Lopez
•Exactly. Clean slate is often worth the extra upfront effort, especially on larger deals.
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Paige Cantoni
Whatever you decide, just make sure you document your decision process well. Auditors love to second-guess these UCC vs restatement choices, especially if there are any collection issues down the line.
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Ana Erdoğan
•Good point about documentation. I'll make sure to keep detailed notes on our reasoning either way.
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Kylo Ren
•I always create a little memo for the file explaining why we chose amendment vs. new filing. CYA documentation that takes 5 minutes but could save hours later.
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Nina Fitzgerald
One more thing to consider - some lenders prefer restatements because it gives them a chance to update their standard language and incorporate any regulatory changes that happened since the original loan. Your loan docs from 3 years ago might be missing some current requirements.
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Ana Erdoğan
•That's actually a really good point I hadn't considered. Our compliance team has updated several standard provisions since then.
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Jason Brewer
•Plus you can fix any awkward wording or provisions that didn't work out as expected in practice. Restatements are great for cleanup.
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Kiara Fisherman
•I used Certana.ai to compare our old loan docs with current templates - highlighted exactly which provisions had changed. Made the restatement decision much clearer.
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