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07-13-2020, 11:32 AM #1
how do ABL lenders check liens on equipment?
how do ABL lenders check liens on equipment?
is there a more in-depth way, rather than just relying on UCC collateral statements? perhaps a company that one would recommend that could do this for a fee?
thank you,
ADAnthony Diamond
Underwriter
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07-13-2020, 11:39 AM #2
- Join Date
- Mar 2015
- Location
- Boynton Beach
- Posts
- 3,477
In depth UCC lien search. Also ask for an equipment listing including values and locations along with an outstanding debt statement on all equipment with copies of financing agreements.
KHKevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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07-13-2020, 12:20 PM #3
Kevin, thanks for the response. So are you referring to the usual UCC lien company such as Wolters Kluwer or CSC ? In my experience, they were only decent for aggregating mass data. Would they do something like this, or would it be done by a firm like a title company that does title searches when dealing with RE which gives you more of an in-depth result like the court filings and all? If the latter, could you recommend on that focuses on equipment in this capacity?
Thanks for your help!Anthony Diamond
Underwriter
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07-13-2020, 12:29 PM #4
- Join Date
- Mar 2015
- Location
- Boynton Beach
- Posts
- 3,477
Anthony,
A lot of states offer their UCC search data based for free. You can view and print all outstanding UCCs. I have used Acurint and found their info to be very reliable. It is also safe to ask for a debt schedule, copies of lending agreements and equipment list. Just because someone did not file a UCC does not mean they don't have a security agreement. Some equipment companies will file blanket uccs on all assets.
KHKevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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07-13-2020, 01:03 PM #5
- Join Date
- Feb 2019
- Posts
- 209
I second this. I would also look at YTD balance sheet. 90% of borrowers always miss some debt sheet & it is easily found on the balance sheet. It is hard to hide assets when you compare YTD financials, last year tax returns, & debt schedule. It will also show you where to shine the flashlight
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07-13-2020, 02:04 PM #6
Yeah I was looking more so to secure certain equipment pieces with a non-blanket UCC and hold the title. I think we could maybe bypass other "blanket UCC" lenders by being more specific with ours and taking the title. If a non-specific financier or other MCA just did some random financing with a blanket UCC, they might not even know exactly what equipment there is. That's why I wanted to see specific liens/title holders as opposed to blanket UCC's that may be filed by a 3rd party which would be practically impossible to interpret unless the merchant was 100% honest as to what collateral is covered in each.
Make sense? I will take your advice and start with the basics - search financials for other liabilities, do a basic UCC search by state, and wait for the merchant to disclose who (if any) hold first positions on certain pieces - then take it from there.
Thanks for the help!Anthony Diamond
Underwriter
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07-13-2020, 02:08 PM #7
- Join Date
- Mar 2015
- Location
- Boynton Beach
- Posts
- 3,477
You would be amazed how many balance sheets are full of crap and never tie to the assets, income, or prior years financials. I can't tell you how many times I have asked a company if they took a cash advance, they said no, never disclosed it on their BS, and I found them doing searches. They will disclose the cash taken, never show the cost of capital as an expense, and never show the liability. Throws off the IS and BS every time.
KHKevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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