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Just to clarify - UCC 9-324 requires filing within 20 days of when the debtor receives possession of the collateral. Training delays that prevent actual use can extend this timeline if properly documented. Your Monday possession date should control, not Friday delivery.
Perfect, that confirms what I was thinking. We have solid documentation of the training requirement and Monday possession transfer.
Good resolution. These timing issues stress me out more than they should, but PMSI priority is too important to mess up.
As a newcomer to equipment financing, this thread has been incredibly educational! I'm working on my first PMSI deal and the timing requirements seemed overwhelming at first. It's reassuring to see that courts generally recognize the difference between physical delivery and actual possession, especially when specialized equipment requires training or setup. The consensus here about documenting everything thoroughly makes perfect sense - better to have too much documentation than not enough when dealing with priority issues. Thanks everyone for sharing your practical experiences with these timing challenges!
Welcome to equipment financing! You're absolutely right that the timing requirements can feel overwhelming at first, but this community is great for learning from others' real-world experiences. One tip I'd add - start building your documentation checklist now while you're learning. Include things like delivery receipts, training completion certificates, possession acknowledgments, and insurance start dates. Having a standardized process will make future deals much smoother and help you avoid the stress that comes with these tight deadlines.
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One more consideration - if your borrower has existing UCC filings from other lenders, make sure you understand the priority rules for after acquired property. First to file usually wins but there are exceptions depending on the collateral type and timing.
Priority can get really complex with after acquired property. Definitely want to understand who has rights to what before you close the loan.
This is why I always run updated searches right before closing. Things can change between application and funding.
Thanks everyone for the helpful responses! This has been really educational. I'm going to go with the "all equipment now owned or hereafter acquired" language and make sure our security agreement matches exactly. The point about coordination between documents is crucial - I'll definitely review both together before filing. Also planning to set a calendar reminder for the continuation filing since our loan term is 7 years. One question though - should we include any specific exclusions in the collateral description or is it better to keep it broad and handle limitations in the security agreement instead?
Welcome to the community! Great question about exclusions. Generally I'd recommend keeping the UCC filing broad and handling any specific exclusions in your security agreement. That way you maintain maximum flexibility for future amendments without having to refile the UCC. Just make sure whatever exclusions you put in the security agreement are clearly defined so there's no ambiguity about what's covered and what isn't.
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Final thought - once you get this termination filed, make sure you get a certified copy of the filed termination statement for your records. Keep it with your loan satisfaction letter. Future lenders will want to see both documents to verify the lien was properly released. And if you do any major asset-based financing in the future, having clean UCC records makes the whole process smoother.
Good advice. I'll definitely keep copies of everything once this is sorted out.
Yeah, these documents have a way of becoming important at the worst possible times. Better to have them and not need them.
As someone who's dealt with this exact scenario multiple times, I can tell you that 6 months really isn't that bad - I've seen companies discover UCC filings that should have been terminated 3-4 years ago! The key thing is that you still have all your paperwork (the satisfaction letter is crucial) and can file the UCC-3 termination yourself. Just make absolutely sure you match the debtor name exactly as it appears on the original UCC-1 filing. Even a small variation like "Inc." vs "Incorporated" can cause a rejection. I'd recommend pulling a copy of your original UCC-1 from the Secretary of State first to verify all the details before filing the termination. Your new lender will definitely want to see that active filing cleared up before they'll proceed with refinancing.
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I remember learning about UCC gaps in law school but never thought I'd actually encounter one in practice. Sounds like you're handling it correctly by looking to supplementary law. The UCC is comprehensive but not complete - that's by design.
Yeah, it's one of those situations where theory meets practice. At least the filing requirements are clear even if the contract interpretation isn't.
Exactly. The UCC provides the framework, but it still needs to work with existing legal principles.
This is actually more common than people realize. I've dealt with several UCC gap situations over the years, and the key is understanding that the UCC was intentionally designed to work alongside existing legal frameworks rather than replace them entirely. For maintenance obligation disputes like yours, you'll typically need to look at your state's contract law and any relevant industry standards. One thing to watch out for - make sure the resolution of your maintenance dispute doesn't inadvertently affect your collateral description or security interest priority. I've seen cases where contract modifications ended up creating UCC filing issues down the road. Document everything and consider whether any amendments to your security agreement will require corresponding UCC-3 filings.
This is really helpful advice, especially the point about documentation. I hadn't considered that resolving our maintenance dispute might require additional UCC filings if we modify the security agreement. We're being careful not to change anything that would affect our collateral description, but it's good to know we should be thinking ahead about potential amendments.
Brady Clean
One thing to watch out for is if you have a mixed situation - some goods where you're relying on automatic perfection and others where you've filed. Comment 5 could create a gap in coverage for the automatic perfection portion if it involves after-acquired property. Better to just file on everything to avoid the complexity.
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Brady Clean
•Plus you get better priority protection and don't have to worry about the timing requirements for automatic perfection.
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Ella Harper
•This is another area where Certana.ai's verification tool is helpful - you can upload multiple UCC documents to make sure you don't have coverage gaps between different filing strategies.
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Sophie Duck
Thanks everyone for the detailed explanations. This really clarifies things for me. Just to confirm my understanding: since we're filing UCC-1 financing statements for our equipment and inventory loans, Comment 5's limitation on automatic perfection for after-acquired property doesn't affect us. The comment is specifically about situations where lenders try to rely on automatic perfection (like the 20-day PMSI grace period) to cover future acquisitions, which isn't sustainable. For filed financing statements under 9-310, our standard "all equipment now owned or hereafter acquired" language should be fine as long as our security agreement matches. I think our compliance team was overthinking this - Comment 5 is more about preventing people from avoiding filing altogether rather than limiting what can be included in properly filed UCC-1s.
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