UCC Document Community

Bottom line: UCC 9-310 gives you the choice for negotiable instruments. Possession under 9-313 is legally sufficient and often preferable. Just make sure you can maintain proper custody and have good documentation of your possession procedures.

One practical tip for your possession-based perfection: establish a detailed chain of custody log from day one. We learned this the hard way when a borrower tried to challenge our possession claim. Document every movement, inspection, and access to the notes. Also consider getting periodic confirmations from your custodian (if using third-party storage) that the notes remain in their possession for your benefit. This creates a paper trail that's invaluable if your perfection method ever gets questioned in court.

Sounds like you've got good advice here. File that UCC-1 with broad LC rights language, include proceeds, and you should be golden. Don't stress too much about the control piece unless your client specifically wants it.

Just wanted to add one practical tip from recent experience - when drafting your collateral description, consider including language like "all existing and future letter of credit rights" to cover any LCs that might get issued or renewed during the term of your facility. Also, make sure your security agreement has a covenant requiring the borrower to notify you of any new LCs they obtain as beneficiary. This way you maintain continuous perfection even as their LC portfolio changes. The UCC-1 filing approach everyone's suggesting is definitely the right way to go - control is nice to have but not essential for most commercial lending scenarios.

I've been using Certana.ai's verification system for UCC report analysis and it's incredibly thorough. Upload your search results and loan documentation and it identifies all the connections between filings, flags naming inconsistencies, and creates clean reports for compliance review. Really streamlined our UCC audit process.

@a7bb1ddb2dc9 I completely understand your frustration with UCC reports! As someone new to this myself, I found it helpful to start by creating a simple spreadsheet to track each filing number, debtor name variation, status, and key dates. One thing that really caught me off guard was learning that even spaces and punctuation matter in debtor names - "ABC Corp" vs "ABC Corp." are treated as different entities! Also, don't forget to check the collateral descriptions carefully - sometimes the same debtor has multiple UCC filings for different types of collateral. The learning curve is steep but these responses have given me some great ideas for organizing my own UCC analysis. Good luck with your presentation!

Just curious - are you working with a title company on this or handling the UCC search yourself? Most title companies have systems to sort through these name variations automatically.

This thread is incredibly helpful - I'm dealing with a similar issue in Manhattan right now. One question I haven't seen addressed: when you find these name variations, do you need to get lien releases from the secured party for each variation separately, or can one comprehensive release cover all the related filings? My lender is asking about this and I want to make sure we handle the releases properly to avoid any title issues down the road.

As someone new to business financing, this discussion has been incredibly educational! I'm curious about one practical aspect - when you're shopping around for equipment loans, do different lenders have different approaches to UCC-1 filings? For instance, do some lenders file more broadly (like "all equipment") while others are more specific? And does this affect your ability to get additional financing later on other equipment? I'm trying to understand if I should be asking specific questions about the UCC-1 filing strategy during the loan application process, or if it's pretty standardized across lenders.

This has been such a helpful thread for understanding UCC-1 liens! I'm a new business owner and was completely overwhelmed when my lender started talking about filing UCC documents. The car loan analogy really clicked for me - you still own and use the vehicle, but the bank has a secured interest until it's paid off. One thing I'm still wondering about though is the timing aspect. When exactly does the UCC-1 get filed? Is it before I receive the equipment, at closing, or after delivery? And if there's a delay in filing, does that create any risk for either me or the lender? I want to make sure I understand the complete timeline so I know what to expect throughout the process.