What do you know about UCC & Equipment Leases?

[getmeoutofhere]

Question: I have several business equipment leases that I am behind on. Some have UCC filings, some do not. My question is, if there is no UCC filing, do they still have a security interest? I am late on a couple of payments and want to know if the can reposses without a UCC filing....

[zimbra]

You would really need to check the documents you signed when you purchased/leased the equipment, but I assume that they would cover recouping the equipment if payments were not made. UCC filings are not always done with equipment purchases/leases, but typically are to notify anybody who would be looking that there is already a security interest on the equipment in question.

[HHM]

These are both good explanations.

UCC filings "perfect" a security interest vs any other creditor that might have a claim on the asset. However, a lender who lent purchase money (i.e. money to you to buy the assets in question) does not need a UCC to have a security interest. However, if some other creditor were to get a lien (e.g. the IRS) against an asset with a security interest but no UCC filing, that creditor would take priority over the lender.