How much does UCC-3 filing cost?

If you have a lien against your business assets, that lien exists on a UCC financing statement that’s on file with your company’s name on it. Making changes to that document involves filling out a UCC3 amendment form and each UCC3 comes with a filing fee. There’s no simple, single answer to the question “how much does a UCC3 cost?” Some things play a role: the state you’re in, whether you’re filing on paper or electronically, how many amendment actions you’re putting on the form. Filers can be tempted to save money and time by trying to put several amendment actions on one UCC3, but it’s a move that could cost you.

An example of this is a situation where the debtor has changed its legal name, and the financing statement is still within the six-month window for a continuation. The loan is not yet paid off, so both a continuation and an amendment reflecting the debtor name change are necessary. It may seem more efficient and cost-effective to put both on a single UCC3 form rather than two separate UCC3s. Four reasons are commonly given: It may save money in filing fees, it saves some time, fewer filings will make record-keeping easier and are less prone to error, and one form is less of an administrative burden than two. Nothing on the UCC3 form precludes checking more than one box for amendments.

Widespread Non-conformity Nationwide

But not all states allow multiple amendment filings. There is widespread non-conformity nationwide. Before sending one, it’s recommended to call the filing office or read its administrative rules. Even in situations where the rules allow multiple amendment filings, staff at the filing office might still refuse them, due to confusion over what combinations of amendments their office will allow. Some filing offices have no rules at all published. In such cases you’ll just have to rely on what you were told when you called, and that might not be what you get when different staff members review and process the filing.

Now, offices that do allow multiple amendments generally do so in a limited way. In other words, office X may allow the amendment to a party’s name to be made along with an amendment to add, change or restate collateral, but not any other way. Office Y, on the other hand, may not accept this combination, but do accept others. What can happen is that, intentionally or by mistake, a filing gets only partially indexed, and there is no easy way to tell.

Typically Limited to Paper Filings

Multiple amendment UCC3s are typically limited to paper filings, as electronic filing systems do not usually permit multiple amendments to be filed in a single transmission. Paper filings generally require more time to process and to receive a filed acknowledgment. While using one form may save some time initially, the wait for a paper acknowledgment will take longer than if you had filed electronically, which is quicker.

Fees are the other piece of the puzzle. In states that still allow paper filing, many charge a higher fee for walk-in or mailed-in filings than for e-filings. And some states that allow a single UCC3 containing multiple actions charge a separate fee for each action, so there is no savings to be had from combining them. In Minnesota, for example, the filing office will charge for each action as if they were separate paper filings, so those savings just disappear.

When They Don’t Index Properly

The more expensive outcome is the one when they don’t index properly. The filing office can index one of two amendments but the acknowledgment may not reflect whether both were indexed or which one was. Worse is when a continuation is combined with another amendment and the filing office does not index the continuation. The UCC will lapse and the filer may not know that the financing statement was never continued.

Multiple action amendments are more unusual, so staff is less familiar with them. Offices can, as has been seen, mistakenly reject one even when their own rules call for accepting it, which leads to delays. Staff can miss one type of amendment, which is especially troublesome when timing matters, as in the case of continuations and name change of debtor amendments. And a set of invalid combinations can lead to only one amendment being indexed, which means another UCC3 has to be prepared and filed, but only if the filer notices.

Listing the incorrect UCC1 file number on the UCC3 is another common mistake. The state will only reject the filing if there is no such number in their system. If the number belongs to a different active filing, the office will accept the filing and attach the amendment to the wrong, unrelated UCC1, and the filer may never know. This is another reason why a search of the filing after it has been filed is highly recommended. The sooner the better, because if the search does not reveal the filing, most likely something is amiss, and then it can still be fixed. If it is a UCC where the debtor’s name has changed, if the filer waits too long it may be too late for the UCC to be effective.

It’s important to remember that UCCs are filed in the first place to provide notice of a security interest to parties who search the record. A multiple amendment filing that’s not filled out correctly and handled right can end up confusing those searchers, and at worst not doing what the filer meant it to do. Worst of all, the filer may not know, even with an acknowledgment in hand. So while multiple amendment UCC3s are legal in many jurisdictions, they aren’t considered best practice. Single filings are much better.