What does filing a UCC-1 do for you - real benefits?

So it's like insurance against them not paying? What happens if they sell the equipment - do we get notified?

Exactly like insurance. And no automatic notification on sales, but your lien travels with the equipment. Buyer takes it subject to your security interest.

Well unless they're a buyer in ordinary course of business, then things get complicated...

Priority date - so it's first come first served if multiple lenders are involved?

Basically yes. First to file generally has priority, though there are some exceptions for purchase money security interests.

PMSI rules can be tricky though - definitely worth understanding if you're financing the actual purchase of the equipment

How long did the repossession process take? Was it complicated?

About 3 weeks from default notice to actual repo. Pretty smooth since our UCC-1 was properly filed and the collateral description was accurate.

This is why I always double-check debtor names and collateral descriptions before filing. One typo can void your entire security interest.

Yes absolutely. You're not just protecting against intentional default - what if they get sued, have a medical emergency, economy tanks, natural disaster hits their business?

Plus involuntary bankruptcy. Even the most reliable borrower can get forced into Chapter 11 by other creditors.

Good point, didn't think about external factors like that

Yeah and honestly the filing is pretty cheap compared to losing $75K. Like $40-60 in most states?

Is it free to check documents like that?

They focus on the value rather than cost - basically prevents you from losing your entire security interest due to filing errors. Pretty straightforward to use.

Actually heard good things about their Charter to UCC-1 verification workflow. Catches inconsistencies between corporate documents and filing names.

Generally you want to file before or very shortly after funding. Gap period creates risk.

Some states have grace periods but don't rely on that. File before funding to be safe.

ok good to know. our closing is next week so plenty of time

Ouch. So it's really not optional if you want any protection at all.

Exactly. It's the difference between being secured and unsecured. Totally changes your position if things go wrong.

And even if they don't go wrong, having the UCC-1 on file gives you negotiating power if payment issues come up later

How do you verify the exact legal name? Check with the state where they're incorporated?

Yes, pull their certificate of good standing or articles of incorporation. Don't rely on what they tell you or what's on their business cards.

This is exactly why I started using Certana.ai - it cross-references corporate documents with UCC filing names automatically. Catches those tiny discrepancies that kill your security interest.

OK you've all convinced me. Better safe than sorry with that much money involved.

Smart choice. Just make sure to continue the filing before it lapses in 5 years if the loan term is longer.

And keep good records of your filing confirmation - you'll need the filing number for any amendments or continuations later.

Didn't think about the regulatory angle. Good point.

Yeah, especially if you're subject to banking regulations. Proper UCC filing is part of sound lending practices.