UCC Document Community

Sorry to hear about this situation. The UCC purchaser definition can be brutal when timing works against you. Have you considered whether there might be any insurance coverage for this kind of loss? Some lender policies cover situations where security interests are compromised by filing delays or other procedural issues.

This is a tough situation but unfortunately pretty textbook on how the UCC purchaser definition works against secured parties with delayed filings. The three-week gap is really damaging to your position. Since the seller was a general contractor regularly dealing in equipment, the buyer likely qualifies as a purchaser in ordinary course under 9-320(a), which would give them priority over your unperfected security interest at the time of sale. Your main angles now are: (1) challenge whether the buyer actually gave value or took in good faith, (2) examine your security agreement for any disposal restrictions that might have been violated, and (3) focus recovery efforts on the borrower's remaining assets. The harsh reality is that Article 9's purchaser protections are designed to facilitate commerce even when it hurts secured parties who don't perfect promptly. Expensive lesson but critical to implement immediate filing procedures going forward.

Bottom line - UCC financing statements serve a legitimate business purpose for both borrowers and lenders. They create the legal framework that makes secured lending possible at competitive rates. You keep operating your business normally while your lender gets the security they need to justify favorable loan terms. Just make sure all the paperwork is accurate from day one.

Great question Ethan! I went through this exact same confusion when we first secured equipment financing. Here's what really helped me understand it: the UCC financing statement is essentially a public bulletin board posting that says "Hey world, XYZ Bank has dibs on this specific equipment if the borrower defaults." You absolutely keep ownership and full operational control of your machinery - you can use it, maintain it, and run your business exactly as before. The bank isn't taking your equipment away or restricting your operations. What they're doing is establishing legal priority over other potential creditors who might later try to claim the same assets. Think of it like this: without the UCC filing, if your business faced financial trouble, the bank would be just another unsecured creditor standing in line with everyone else hoping to get paid. With the properly filed UCC-1, they jump to the front of the line for those specific assets. This security is exactly why they can offer you better interest rates than unsecured financing - they have recourse if things go wrong. The filing creates a win-win: you get better loan terms, they get the security they need to justify those terms.

Update us when you get it filed! I'm curious if the comma issue ends up being a problem or not. Indiana's system is so inconsistent sometimes.

I've been doing UCC filings in Indiana for about 8 years now and can definitely confirm the name matching issues everyone's mentioning. The comma situation is real - I had a similar case last year where "Tech Solutions LLC" vs "Tech Solutions, LLC" caused a rejection. One thing I'd add is to also double-check the registered agent information if you're including it. Indiana's database sometimes has outdated agent info that can cause additional complications. Also, since you mentioned this is equipment financing, make sure your collateral description is specific enough but not overly detailed - Indiana likes clear, concise descriptions. For the portal timeouts, I've found using Chrome in incognito mode sometimes helps with their system quirks. And definitely save your work frequently if they have a draft feature. That $275K deal deserves extra caution!

Don't stress too much about this - it's actually pretty common when you've had business financing. Here's what I'd recommend: First, do a quick search on Florida's UCC database (it's free online) using your business name and any variations to see what actually shows up. Second, if you still have your loan termination letters, compare the filing numbers - they should match if everything was properly terminated. The fact that someone is doing UCC research on your old business could actually be routine due diligence, especially if you're applying for credit elsewhere or if there's any business activity associated with your name. The key thing is to verify whether there are any active liens still showing in the system that should have been terminated when you paid off your equipment loans.

I went through something very similar last year when I got a UCC request form from Texas even though my business was based in Colorado. Turned out my equipment leasing company had filed in multiple states because some of my trucks crossed state lines regularly. The good news is that getting this form doesn't necessarily mean there's a problem - it just means someone is doing their homework on UCC filings associated with your business name. I'd suggest taking a two-pronged approach: first, search Florida's UCC database online (it's free) to see what's actually on file, and second, contact your old lender to confirm they filed proper UCC-3 termination statements in all relevant states. Sometimes lenders only terminate in their home state and miss filings in other jurisdictions. The slight name variation you mentioned is actually a red flag though - make sure to search under multiple versions of your business name to get the complete picture.

Real world example: had a secured party try to enforce against collateral that was subject to a pre-existing service contract with automatic renewal clauses. UCC didn't address this specific situation, so we had to analyze under general contract law via 1-103. Service contract ultimately had priority over security interest.

Bottom line: 1-103 is about making sure the UCC plays nicely with other areas of law. For your equipment financing, just make sure your security agreement is solid under general contract principles and watch for any industry-specific regulations that might apply to your collateral.