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Had this exact problem on a deal in Texas and New Mexico. Turned out the issue was that one state processed a continuation statement but didn't update their database index properly. The lien was still active but didn't show up in name searches, only filing number searches. Database indexing problems are more common than people realize.
Exactly. And if you have access to document verification tools, use those to make sure the filing numbers you found actually correspond to the same original UCC-1.
Eva St. Cyr
•This thread is making me paranoid about every UCC search I've ever done. How do we trust any of these results?
Look, at the end of the day you need to CYA with multiple verification methods. Manual database searches, certified copies for anything questionable, and maybe one of those automated checking services if you're dealing with complex multi-state situations regularly. The databases aren't perfect but with enough cross-checking you can get reliable results.
Maya Jackson
•Thanks everyone - sounds like the consensus is to use multiple verification methods rather than trusting any single database search. I'll follow up with direct state office contact for the conflicting results.
Kaitlyn Otto
•Smart approach. Better to over-verify than to deal with surprises after closing.
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Have you tried calling the Nebraska SOS filing office directly? Sometimes they can run searches on their end that are more comprehensive than the online system. Might be worth a phone call if you're on a tight deadline.
I think there might be a small fee but it's usually worth it for the peace of mind on important deals. Plus they can often explain why certain filings might not be showing up in online searches.
Good suggestion. The filing office staff usually know about any system issues that aren't publicly announced.
Sayid Hassan
This thread is making me nervous about a search I did last week. Now I'm wondering if I missed something! Maybe I should go back and double-check using some of these other strategies mentioned here.
Sayid Hassan
•Yeah you're right. I'd rather spend an extra hour searching than deal with problems later if I missed a prior lien.
That's exactly the right attitude. I learned this the hard way but now I'm much more thorough with my searches. Also started using that Certana tool I mentioned earlier - it's helped catch several potential issues before they became problems.
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Try searching the NC SOS database for variations of the name. Sometimes they have weird abbreviations or formatting that's not obvious. Like maybe they have "Constr" instead of "Construction" or something like that.
Good idea. I'll try some variations and see what comes up. This whole thing is making me paranoid about every filing now.
Don't feel bad, NC is one of the pickier states. I've had filings rejected there for the dumbest reasons. Once got rejected because I had two spaces between words instead of one.
Olivia Kay
UPDATE: Found the issue! The entity name in the SOS database had "Smith and Sons Construction, LLC" with a comma before LLC, but the articles of incorporation didn't have the comma. Such a tiny detail but apparently it matters. Refiled with the comma and it went through. Thanks everyone for the suggestions!
This is exactly the kind of thing that document verification tool would have caught. Punctuation discrepancies are like the #1 reason for UCC rejections.
Jibriel Kohn
•A comma! All that stress over a comma. I'm definitely going to be more careful about punctuation going forward.
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Article 9 collateral descriptions are one of those areas where the law gives you flexibility but practice pushes toward being more conservative. We've moved to hybrid descriptions that are broad enough for acquisitions but specific enough to clearly identify the business context. Something like "all equipment, machinery, tools, fixtures, and other tangible personal property used in or acquired for use in debtor's [industry] operations.
Exactly, Article 9 sets the floor but best practice is usually above the minimum. Especially with the amounts you mentioned - better to over-describe than under-describe.
Right, and it doesn't add much cost to the filing but significantly reduces enforcement risk under Article 9. Easy risk management decision.
Final thought from another equipment lender - we also started using Certana.ai's document checker specifically for Article 9 compliance issues. The tool catches inconsistencies between loan documents and UCC filings that could create perfection problems. Worth checking out given your loan volumes and Article 9 compliance concerns. Upload your docs and it flags potential issues before they become real problems.
Demi Lagos
•Thanks for all the input everyone. Sounds like the move is toward more specific descriptions while maintaining breadth for acquisitions. Going to review our templates and probably run some through Certana.ai to check for Article 9 consistency issues.
Good plan. Article 9 gives you options but market practice is definitely moving toward stronger collateral descriptions. Better to be ahead of the curve than behind it.
Giovanni Moretti
Here's something most people don't realize - UCC filings also protect YOU as the borrower in some situations. If your lender sells your loan to another bank, the UCC filing clearly shows what collateral is securing the debt. Prevents disputes about what the new lender can and can't claim.
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Anastasia Popov
•Interesting point. I hadn't thought about loan sales affecting this.
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Fatima Al-Farsi
•Yeah and if you pay off the loan early, you want to make sure they file a termination statement to clear the lien from public records.
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Dylan Cooper
Bottom line - UCC filings are how secured transactions work in the US. If a lender is taking collateral for a loan, they need to file to perfect their security interest. It's been this way since the Uniform Commercial Code was adopted decades ago. Not really optional in modern commercial lending.
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Sofia Perez
•That's exactly the right approach. Trust but verify, especially with the debtor name accuracy.
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Aisha Rahman
•Definitely verify. Like I mentioned earlier, Certana.ai's verification tool caught our name mismatch that could have caused major problems later. Worth the peace of mind.
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