These days, nearly every state filing office accepts some form of electronic filing (E-filing) for UCC documents, often either through xml transmission or a fillable web form. Some states are even beginning to mandate E-filing for UCCs. Back in 2012, Colorado became the first state to require that all UCC filings be submitted electronically. Since then, other states have followed suit, including New Jersey and North Dakota who made the switch just last year.
In recent years, E-filing has been gaining popularity among lenders and other high-volume UCC filers owing to a couple of key benefits. First, E-filing is a great way to reduce UCC filing costs. That’s because most states charge a lower fee to file a UCC that is submitted electronically than they do for a document that is presented for “over the counter” processing. Consider Delaware, for example, where a one-page, single debtor UCC Financing Statement submitted in paper form will incur a $60 filing fee while that same document submitted electronically will incur a charge of only $30.
E-filing UCC documents not only saves money it also saves time. A paper filing is subject to indexing backlogs and other processing delays at state filing offices, which can slow the turn-around time for acknowledgement. A filing that is submitted electronically requires little (if any) filing officer involvement though, so it is often assigned a date and file number much more quickly. In fact, most E-filed UCCs are acknowledged within 24 hours – sometimes even sooner.
Despite these benefits, some UCC filers have been reluctant to adopt E-filing over concerns about formatting changes that can occur with electronically filed UCC documents. Here’s why.
If you elect to begin E-filing your UCCs, it is important to be aware that the acknowledgement copy you receive back from the state may look different from the document you prepared. In many states, an electronically filed document will undergo minor changes during the submission process. These can include converting text to ALL CAPS, changes to font style or size, adjustments in spacing or formatting of collateral descriptions and more.
UCC experts agree that these changes are purely cosmetic and will not compromise the effectiveness of the record, but it is always best to know what to expect when making a change to an important business process.
Ready to Start E-filing? The CLAS Information Services UCC eZFILE® system offers E-filing in every state that accepts UCCs electronically. That’s over 40 filing offices nationwide! As an added benefit, every document submitted through UCC eZFILE® is reviewed by one of our highly trained UCC experts to catch potential filing errors, reduce rejected filing and save you money. Contact CLAS today to schedule a free system demonstration!
For informational purposes only; content does not constitute legal advice.