UCC Pre-Filing Authorization Letter

Summary

This template is a financing statement pre-filing authorization letter. A lender would require a borrower to sign this letter to authorize the lender to file a Uniform Commercial Code (UCC) financing statement against the borrower’s collateral before closing the related financing. This template includes practical guidance and drafting notes. The UCC permits a creditor to file a financing statement if the debtor has entered into a security agreement or if the debtor has provided authorization in an authenticated record (U.C.C. § 9-509). An early filing would therefore require such an authenticated record (i.e., this authorization letter). Lenders may require an early filing: • To establish priority over subsequent filers –and– • To ensure the statement was properly filed and on record before extending any loans The early filing also reduces the risk that the security grant would be voidable as a fraudulent conveyance in a bankruptcy proceeding. Such a determination would be based in part on how long before bankruptcy the debtor conveyed its assets to its creditors. Even with the early filing, the collateral covered by the financing statement is not fully perfected until the credit facility has closed and the borrower has granted its collateral to the lenders in a security agreement. For further guidance on these perfection and priority issues, see: • Article 9 Scope, Choice of Law, and Priority Rules • UCC Financing Statements and Amendments • Security Interests Resource Kit