After funding a deal and filing a UCC Financing Statement, it's critical to keep an eye out for post-closing events that could jeopardize your ability to collect. CLAS suggests following the ABCs of post-closing due diligence to protect your priority for the life of your loan.
Always Perform a Search to Reflect
A search to reflect is a great way to catch UCC filing mistakes before it's too late. Sometimes referred to as a post-filing verification search, the value of a search to reflect is twofold. First, the search will confirm that the filing office made no errors when indexing your document and second, it will verify your lien position relative to other creditors.
Be Mindful of Changes in the Public Record
It is important to monitor for changes in the public record that could affect your position to collect. Debtor monitoring programs perform regularly scheduled UCC and/or corporate database searches and alert you to any important changes such as unauthorized terminations, new UCC or tax lien filings, changes in corporate status, mergers, name changes, etc.
To maintain a healthy UCC portfolio you must carefully track UCC lapse dates and file timely Continuation Statements when a debtor's financial obligation extends beyond five years. It is important to manage this process meticulously, as a lapsed UCC filing ceases to be effective and can open the door for a junior creditor to move into a first-priority position.
CLAS offers a full suite of post-closing solutions to help you preserve your priority position and minimize your risk. To learn more about these services, contact CLAS at 800.952.5696 or firstname.lastname@example.org. Or, simply click on Contact CLAS below and a CLAS representative will get back to you shortly.