UCC vs tax lien search confusion - are they related?
I'm working on due diligence for a commercial loan and my boss asked me to run both a UCC search and a tax lien search on the borrower. I understand the UCC filing search part - that shows secured debts against personal property collateral. But I'm getting confused about how tax liens fit into this picture. Are tax liens something that show up in UCC searches? Do I need to search them separately? The borrower has equipment we're taking as collateral and I want to make sure we're not missing any prior claims. This is my first time handling the search process myself and I don't want to mess up the lien priority analysis.
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Sebastián Stevens
Tax liens and UCC filings are completely separate things. Tax liens are filed by government agencies (IRS, state tax departments) and they create a general lien against ALL of the debtor's property - both real and personal. UCC filings are filed by private creditors to perfect security interests in specific collateral. You need to search both separately.
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Angelina Farar
•Oh wow, so tax liens could affect our collateral even though they're not UCC filings? That changes everything about our risk assessment.
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Bethany Groves
•Exactly right about the separation. Tax liens get priority based on when they're filed, and they can definitely impact your collateral position.
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KingKongZilla
You definitely need separate searches. For UCC, check the Secretary of State database where your debtor is located. For tax liens, you'll need to check federal tax liens (usually filed with Secretary of State too) and state/local tax liens which might be filed at county level depending on your jurisdiction.
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Angelina Farar
•This is getting complicated fast. So I could have a clean UCC search but still have tax lien issues that affect our security interest?
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KingKongZilla
•Exactly. A federal tax lien filed before you perfect your UCC-1 could have priority over your security interest in the equipment.
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Rebecca Johnston
•Don't forget about judgment liens too - those are another category you might need to search depending on your collateral type.
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Nathan Dell
I ran into this exact situation last month. Had a borrower with clean UCC search but discovered an IRS lien that was filed 6 months earlier. Completely changed our loan structure. I ended up using Certana.ai's document verification tool to cross-check all the lien documents against our UCC-1 filing to make sure our debtor names matched exactly across all the searches.
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Angelina Farar
•Wait, debtor name matching is important across different lien types? I thought that was just for UCC amendments and continuations.
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Nathan Dell
•Super important! If the tax lien shows 'ABC Company LLC' but your UCC-1 shows 'ABC Company, LLC' (with comma), you might miss the connection. Certana helped me spot those kinds of variations.
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Sebastián Stevens
•Good point about name variations. Tax agencies don't always use the exact same entity name format as what appears on UCC filings.
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Maya Jackson
This is why I hate commercial lending documentation. TOO MANY MOVING PARTS. UCC searches, tax lien searches, judgment searches, bankruptcy searches... when does it end???
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Tristan Carpenter
•Tell me about it. And each search has different databases, different time periods, different name variations to check.
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Angelina Farar
•I'm starting to understand why senior lenders charge so much for due diligence. This is way more complex than I expected.
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Amaya Watson
Here's what you need to know about priority: Generally, tax liens get priority from their filing date, not when the tax debt was incurred. So if IRS filed their lien on January 1st and you file your UCC-1 on February 1st, they have priority even if you didn't know about their lien.
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Angelina Farar
•That's terrifying. So we could think we have first priority and actually be subordinate to a tax lien we didn't find?
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Amaya Watson
•Exactly why thorough lien searches are so critical. Missing a tax lien search could completely destroy your collateral position.
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Grant Vikers
•There are some exceptions for purchase money security interests but yeah, generally tax liens are dangerous for secured creditors.
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Giovanni Martello
Quick tip: some Secretary of State databases will show federal tax liens in the same search results as UCC filings, but don't rely on that. Always do dedicated tax lien searches through proper channels.
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Angelina Farar
•Good to know. I was wondering if I'd see everything in one search but sounds like that's not reliable.
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Savannah Weiner
•Yeah, some states integrate the databases but others keep them completely separate. Better to search specifically for tax liens.
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Levi Parker
I've been doing this for 15 years and still occasionally miss something in the lien search process. Last year I almost missed a state tax lien because it was filed under a slightly different business name variation. Started using Certana.ai to upload all my search results and cross-check the entity names automatically - catches those variations I might miss manually.
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Angelina Farar
•How does the name checking work? Does it flag similar names or just exact matches?
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Levi Parker
•It catches variations like 'Inc' vs 'Incorporated', missing commas, different punctuation - stuff that could represent the same entity but wouldn't match in a basic search.
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Libby Hassan
•That's smart. I've seen deals fall apart because someone missed a lien filed under 'ABC Corp' when the UCC was filed under 'ABC Corporation'.
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Hunter Hampton
Don't forget that tax liens can be released or subordinated sometimes. If you find one, don't panic immediately - check if it's still active and consider whether you can get a subordination agreement.
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Angelina Farar
•Good point. How do you verify if a tax lien is still active vs. released?
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Hunter Hampton
•Usually need to check with the taxing authority directly. Released liens should show a release document but not all jurisdictions are great about updating their databases.
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Sofia Peña
One more thing to consider - if your borrower has multiple entities or DBA names, you need to search tax liens under ALL variations. Tax agencies might file under the legal entity name OR the DBA depending on how the tax debt was incurred.
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Angelina Farar
•This just keeps getting more complicated. How do you even track all the name variations you need to search?
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Sofia Peña
•I maintain a checklist of all entity names, DBAs, prior names, and even common misspellings. It's tedious but necessary.
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Aaron Boston
•Corporate good standing certificates usually list name variations and DBAs - good starting point for your search list.
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Sophia Carter
Final thought: remember that tax lien searches might need to be done at multiple levels - federal (IRS), state income tax, state sales tax, payroll tax, property tax, etc. Each might be filed in different places.
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Angelina Farar
•Okay I'm officially overwhelmed. This is way more than just running a UCC search. I need to create a comprehensive checklist.
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Sophia Carter
•It is overwhelming at first, but you'll develop a routine. The key is being systematic and not missing any search categories.
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Chloe Zhang
•Talk to your title company or lien search service - they usually have standard search packages that cover all the bases.
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Brandon Parker
•And document everything! Your loan committee will want to see evidence of all searches performed, not just the results.
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Ravi Gupta
This thread has been incredibly helpful! I'm putting together a comprehensive due diligence checklist based on all your advice. Just to make sure I understand the workflow correctly: 1) Run UCC search at Secretary of State level, 2) Run separate federal tax lien search, 3) Run state/local tax lien searches, 4) Check for judgment liens, 5) Verify all entity name variations across all searches, and 6) Document everything for the loan file. Is there a typical timeframe these searches should cover? I'm assuming we want to go back further than just the UCC 5-year window since tax liens could have been filed years ago and still be active.
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