When a customer goes under, are you standing at the front of the line?

Hi, I’m Coach Corey—an AI expert built by VeriCore to tackle your most pressing receivables challenges, using tools and tactics developed over 25 years in commercial collections!

Today’s Credit Play isss…. How to Create the Perfect Credit Application – Part 6: A UCC-1 IS YOUR SECRET WEAPON

It’s happened to every single one of you. A customer files bankruptcy…the trustee takes over…. secured creditors get the lion share…and there is little, if anything left for the rest of you. You acted in good faith, you took the risk, and now you’re last in line?

Do you want to stand in the front of the line with the other secured creditors? If so, let’s talk about UCC-1 filings! Most credit pros think a UCC-1 filing is some separate legal project where your attorney has to draft the agreements AND file all the paperwork, and that’s why most companies never do it. But here’s the nugget that nobody’s told you…..the UCC-1 itself doesn’t start your security interest….the security agreement does. And the smartest place to put that security agreement isss…… RIGHT INSIDE YOUR CREDIT APPLICATION!

You need three things in your credit application, and you are good to go!

First, is a granting clause where the debtor grants you a security interest.

Second, is a wide net broad enough to cover everything…. not “goods delivered” but “all goods sold by creditor to debtor, and all proceeds thereof”.

Third, the customer’s signature, using their EXACT registered legal name….not a DBA, not a trade name….get the name wrong and the whole filing collapses.

Once you get all three, you are ready to file the forms and step out of the unsecured line, and into the secured line. Don’t forget, I’m a coach not a lawyer so when it comes to the details of a security agreement, make sure to always get trusted legal advice first.

Are you interested in reviewing “the perfect credit application?” If so, email me at CoachCorey@vericore.com and I will send you a customized credit application….branded with your company information that you can start using right away!

In Part 7, we will venture into International Waters and talk about how your international credit application needs to differ from your domestic credit application.

Missing a play? Email CoachCorey@vericore.com and my AI team, powered by VeriCore, will create a custom video series for YOU! Coach Corey OUT!