UCC Document Community

This happens more often than people realize. Many businesses assume their main commercial agreement (loan, lease, etc.) automatically creates a perfectable security interest, but UCC Article 9 has specific requirements for security agreement formation. Without proper agreement language, there's no security interest to perfect.

Been there! Our first few UCC filings got rejected for the same reason. The problem was our loan agreements talked about collateral but never actually said the borrower was granting us a security interest in it. Had to learn the hard way that UCC filings require very specific underlying documentation.

Bottom line: get your documents consistent before filing. I learned this the hard way when a UCC-1 got rejected because the collateral description didn't match what was actually in our security agreement. Now I always double-check everything matches up. There are tools that can help with this kind of verification if you don't want to do it manually.

UPDATE: Finally got this sorted out. Turns out the lender did want both the equipment AND our accounts receivable from jobs using the equipment. The 'account UCC definition' confusion was because they were using sloppy terminology. Equipment stays equipment, future receivables are accounts. Two separate types of collateral, both properly described now in the UCC-1. Thanks everyone for the help working through this!

I would also recommend getting title insurance for this transaction if the dollar amount justifies it. Even with thorough UCC 11 searches, there's always risk of missing something or having liens appear after closing. Title insurance can provide additional protection for larger equipment purchases.

Thanks everyone for the detailed responses. I've run additional searches using various name formats and found 2 more liens I initially missed. I'm definitely going to use the Certana.ai tool mentioned to verify I have everything before moving forward. The seller is now claiming they weren't aware of some of these liens, which makes me even more cautious about this deal. I'll make sure to get written lien release commitments for every single filing before closing.

One more thing to consider - if your borrower has significant international operations, you might want to coordinate the timing of your UCC filings with their PPSR registrations to avoid gaps in coverage. Even though they're separate systems, the underlying collateral might move between jurisdictions.

Update: Thanks everyone for the advice. I ended up creating separate, clean UCC-1 filings for each entity with US-only collateral descriptions. Removed all PPSR references from the UCC documents but kept the comprehensive GSA as the master agreement. Everything got accepted without issues.

Just wanted to add that timing is important here. If you're going to file amendments or new UCC-1s, don't wait. The gap between discovering the problem and fixing it could be used against you if there's a dispute over priority.

Update us on how the document review goes! This thread has been really helpful for understanding the importance of getting debtor names exactly right.