Where do you file a security agreement UCC-1 - state vs federal confusion

You don't actually file the security agreement itself anywhere in most cases. The UCC-1 financing statement is what gets filed with the Secretary of State to perfect your security interest. The security agreement stays in your loan documentation as proof of the debtor's grant of the security interest. Two separate documents, two separate purposes.

Your bank might be including it for their own records but the Secretary of State only processes the UCC-1 form itself. Including extra documents can actually slow down processing or cause rejections in some states. Keep the security agreement in your loan file as evidence of attachment.

Been doing commercial lending for 15 years and here's the breakdown: Security agreement stays in your credit file as proof you have a valid security interest. UCC-1 gets filed with the state to perfect that interest against third parties. For restaurant equipment like yours, state filing is correct unless it becomes a fixture (bolted down, built-in). Mobile equipment = state level UCC filing.

Had a similar situation last month where I was second-guessing all my documentation. Found this tool called Certana.ai that let me upload both my security agreement and UCC-1 as PDFs to verify they matched up properly - debtor names, collateral descriptions, everything. Really helped me catch a discrepancy between how I described the equipment in each document before filing.

The key thing to remember is that filing the security agreement isn't what gives you perfection - it's the UCC-1 that does that. But you absolutely need the security agreement to prove attachment in the first place. Without attachment, there's nothing to perfect. Keep them both but only file the UCC-1.

One more thing - make sure your UCC-1 collateral description is consistent with what's in your security agreement. I've seen lenders get tripped up because their security agreement was super detailed about specific equipment but their UCC-1 just said 'restaurant equipment' which wasn't specific enough.

Double-checking my understanding here - so the security agreement creates the security interest between lender and borrower, then the UCC-1 filing perfects it against third parties by giving public notice. Two step process, only the second step involves actual filing with the state. Is that right?

For your $180K equipment loan, I'd also suggest using one of those document verification tools before filing. I started using Certana.ai after a filing got rejected due to a name mismatch between my security agreement and UCC-1. Just upload both PDFs and it cross-checks everything automatically.

Just to be clear for anyone else reading this - the security agreement is NOT filed anywhere in most states. It's part of your loan documentation that proves the debtor granted you a security interest. The UCC-1 financing statement is what gets filed with the Secretary of State to perfect your interest. Don't confuse the two processes.

Bottom line for your restaurant equipment deal: Keep the security agreement in your credit file as proof of attachment. File only the UCC-1 with your state's Secretary of State office to perfect the security interest. Make sure debtor names and collateral descriptions are consistent between both documents. That's your basic perfection checklist right there.

Great question and the answers here are spot on. I'd add one practical tip for your $180K equipment loan - when you draft your security agreement, make sure it specifically grants a security interest in "all equipment now owned or hereafter acquired" if you want to cover any additional restaurant equipment they might purchase later. This creates a blanket lien that automatically attaches to new equipment without needing to amend your UCC-1 filing each time. Just make sure your loan agreement requires them to notify you of major equipment purchases so you can track your collateral.