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As someone who just went through this process with a $150K equipment loan, I can confirm that my lender handled the UCC-1 filing completely. They explained that it's in their best interest to control the process since they need the lien properly perfected to secure their investment. The filing fee was just rolled into my closing costs, which seemed standard. What I found helpful was asking them to walk me through exactly what they were filing and when - they showed me the draft UCC-1 before filing so I could verify all the details were correct. For a $180K loan, your lender should definitely be handling this professionally. If they're being vague about who's responsible, I'd push for a clear answer in writing before closing.
That's really helpful to hear from someone who just went through the same situation! I like the idea of asking to see the draft UCC-1 before they file it - that seems like a smart way to catch any potential issues early. Did you have any concerns about the collateral description or debtor information when you reviewed it?
Thanks everyone for the helpful responses! This clears up a lot of my confusion. It sounds like the standard practice is definitely for the lender to handle the UCC-1 filing, which makes sense given they're the ones who need the security interest perfected. I'm going to follow up with my loan officer tomorrow to get explicit confirmation that they're handling it and ask to review the draft filing before they submit it. I really appreciate the advice about getting a copy of the filed financing statement at closing too - I'll make sure to request that. For anyone else in a similar situation, it seems like the key takeaway is to get clear written confirmation of who's responsible for what, especially for future amendments and continuations.
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As a newcomer to this community, I'm amazed by the depth of knowledge everyone has shared here! This thread has been like a masterclass in security interests. I'm just starting my career in corporate finance and was completely overwhelmed when my supervisor asked me to help with due diligence on a potential acquisition - suddenly I'm seeing UCC filings, mortgage documents, and various lien references everywhere. The way you've all broken down how these concepts work together has been incredibly helpful. One thing I'm still wrapping my head around: when conducting due diligence on another company, is it standard practice to run UCC searches on all their entity names and subsidiaries? And should I be concerned if I find UCC filings that seem to cover "all assets" versus more specific collateral descriptions? I'm trying to understand what red flags to watch for versus what's normal business practice. Thank you all for creating such a welcoming learning environment for newcomers!
@StarStrider welcome to both the community and the world of M&A due diligence! @Ashley and @Malik have given you excellent guidance. I'd add one more layer to consider - when you're reviewing those UCC filings during due diligence, also pay attention to the secured party information. Sometimes you'll find filings where the secured party has changed (due to loan assignments or bank mergers) but the UCC records might not reflect current ownership. This can complicate deal negotiations if you can't easily identify who actually holds the security interests. Also, don't overlook UCC-3 amendments - they can tell a story about how the company's borrowing relationships have evolved, collateral has been released or added, or whether there have been defaults that required modifications. One practical tip: create a simple matrix matching each UCC filing to the corresponding debt disclosed in their financial statements - any mismatches deserve follow-up questions. The fact that you're thinking about red flags versus normal practice shows you're developing the right analytical mindset for this work!
@StarStrider welcome to the community! As someone who recently navigated my first M&A due diligence project, I completely understand that overwhelming feeling when you're suddenly immersed in all these different types of security filings. One thing that really helped me was creating a simple checklist for each target entity: 1) Run UCC searches under exact legal name and variations, 2) Check for any DBAs or former names, 3) Search subsidiaries separately, 4) Cross-reference findings with disclosed debt schedules. Regarding those broad "all assets" UCC filings - @Ashley is absolutely right that they're standard practice. What I learned to focus on is whether the collateral description makes sense for the business type and whether it matches what's described in their loan agreements. For example, if you see a filing covering "inventory" but the target is a pure service business, that might warrant a follow-up question. Also, don't forget to note expiration dates - UCC filings that are close to lapsing could create urgent action items for the acquiring company post-closing. The learning process is intense but you're asking all the right questions!
As someone just starting out in corporate finance, this entire discussion has been incredibly eye-opening! I've been struggling to understand these concepts in my new role, and seeing how everyone has broken down the relationship between liens, security interests, and UCC filings has finally made it click for me. The analogy someone used about liens being the "umbrella term" with UCC filings being one specific method of perfection really helped. I'm curious about one practical aspect though - when you're doing these security interest audits, how do you handle situations where a company has undergone name changes or mergers? Do you need to search under all historical entity names, or is there a statute of limitations on how far back you should go? Also, are there any industry-specific considerations I should be aware of? I work with healthcare companies and I'm wondering if medical equipment or patient accounts receivable have any special filing requirements compared to general business assets.
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Just a heads up - I tried handling a similar situation myself and totally messed up the UCC-3 filing. Had to refile twice because I used the wrong amendment type. Ended up using Certana.ai's document checker for the third attempt and it worked perfectly. Wish I'd used it from the start!
What kind of mistake did you make on the amendment?
I checked the wrong box - put termination instead of partial release. The system flagged it as inconsistent with my original filing.
For what it's worth, I've found that most equipment sales go smoothly if you just follow the basic steps: 1) Check loan agreement for consent requirements, 2) Get proper authorization, 3) Coordinate sale timing, 4) File UCC-3 amendment promptly, 5) Update your collateral tracking. The "UCC sale definition" thing is really just industry shorthand.
@Edwards Hugo This checklist approach is brilliant! As someone new to UCC filings, I m'wondering - do you have any recommendations for staying current on state-specific requirements? I ve'heard some states have different rules for partial releases vs. amendments.
@Aurora Lacasse Great question! I subscribe to a few UCC update services and honestly found that most states follow pretty similar patterns for amendments. The key is checking your secretary of state s'website - they usually have sample forms and instructions. Also, some of the filing services like CT Corporation will handle the state-specific requirements for you if you don t'want to track all the variations yourself.
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Update us when you finish! Would love to hear what percentage of your filings needed corrections. Always curious about industry benchmarks for filing accuracy.
In my experience, expect about 15-20% to have some kind of issue that needs attention. Sounds high but most are minor corrections.
That matches what I've seen too. The key is distinguishing between cosmetic issues and actual perfection problems.
This is such a timely thread for me! I'm actually about to start a similar UCC filing review project - around 60 filings from the past few years that need scrubbing before our year-end audit. Reading through everyone's experiences here has been incredibly helpful. The systematic spreadsheet approach that Amara mentioned sounds like exactly what I need, and I'm definitely going to look into that Certana.ai tool that Yuki and Zainab recommended. It's reassuring to know that 15-20% error rates are normal - I was worried our portfolio might be uniquely messy! Thanks everyone for sharing your war stories and solutions.
Nathan Kim
Update: Just got off the phone with VA SCC. They confirmed system maintenance through end of week but said searches should be working intermittently. Recommended trying multiple times throughout the day rather than giving up after first timeout.
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Joshua Wood
•End of week still seems pretty long for a 'maintenance window' but at least they acknowledged the problem.
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Nathan Kim
•Yeah, not great timing but at least we know what we're dealing with now. Going to keep trying the searches periodically.
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Sofia Torres
I'm dealing with the same VA SCC search issues and it's been incredibly frustrating. Started having problems about 4 days ago when trying to pull searches for several UCC renewals. The timeout errors are constant and even when I do get through, the results seem incomplete. Really appreciate everyone sharing their workarounds here - going to try the single name searches and off-peak timing suggestions. Also planning to call VA SCC directly for phone verification on my most critical filings since I can't afford to miss any deadlines. Has anyone had luck with their customer service line lately or are they swamped with calls about the system issues?
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