Introduction
The collateral description is one of the most important — and most frequently mishandled — elements of a UCC-1 Financing Statement. Too narrow and you may fail to protect all of your collateral. Too vague and a court may find the description legally insufficient.
Article 9 of the Uniform Commercial Code organizes collateral into defined categories, each with its own rules for perfection, priority, and description. This guide covers every major collateral type under Article 9, with practical notes on how each is described in a financing statement.
Two Broad Categories: Tangible and Intangible
All Article 9 collateral falls into one of two broad categories: tangible (physical property you can touch) and intangible (rights and obligations that have no physical form).
Tangible Collateral: Goods
Goods are any tangible personal property — physical things that are movable at the time the security interest attaches. Article 9 divides goods into four sub-categories based on the debtor's primary use:
| Goods Sub-Category | Definition & Examples |
|---|---|
| Consumer Goods | Goods used or bought primarily for personal, family, or household purposes. Examples: a personal vehicle, home appliances, furniture. PMSIs in consumer goods are automatically perfected without filing. |
| Inventory | Goods held for sale or lease, or materials used in a business. Examples: a retailer's stock, a manufacturer's raw materials and work-in-progress, goods leased to others. |
| Equipment | Goods used in a business that don't fit the other categories. Examples: a CNC machine, a delivery truck, office furniture, computers used for business. The residual category — if in doubt, it's equipment. |
| Farm Products | Goods that are crops, livestock, supplies used in farming, or products of crops or livestock in their unmanufactured state. Subject to special rules under the federal Food Security Act. |
Filing Tip: The same asset can fall into different categories depending on who holds it and for what purpose. A car held by a dealer is inventory. The same car in the hands of a business owner used for sales calls is equipment. The same car used by a consumer for commuting is a consumer good.
Fixtures
Fixtures are goods that have been so permanently attached to real estate that they have become part of it — but are still treated as personal property for UCC purposes. Think of commercial HVAC systems, built-in manufacturing equipment, or elevators.
Securing a fixture requires a special "fixture filing" at the county real property records office (in addition to or instead of the central state filing), and the financing statement must include a description of the real property to which the fixture is attached.
Intangible Collateral
Article 9 also covers a broad range of intangible assets — rights and obligations that represent value but have no physical existence. These are among the most commercially significant forms of collateral in modern finance.
| Intangible Collateral Type | Definition & Examples |
|---|---|
| Accounts | Rights to payment for goods sold or services rendered that are not evidenced by an instrument. Examples: trade receivables, credit card receivables, health care insurance receivables. The backbone of invoice factoring and asset-based lending. |
| Chattel Paper | Records that evidence both a monetary obligation AND a security interest in specific goods. Examples: a retail installment sale contract for a car that includes a security interest in the car. Can be tangible (paper) or electronic. |
| Instruments | Written promises or orders to pay money — negotiable instruments like promissory notes, checks, and drafts, as well as certificates of deposit. Typically perfected by possession, not filing. |
| Investment Property | Securities, security accounts, commodity contracts, and commodity accounts. Typically perfected by control. |
| Deposit Accounts | A bank account maintained with a bank. Can only be used as collateral in non-consumer transactions under Article 9. Perfected exclusively by control — not by filing. |
| General Intangibles | The catch-all category for intangible property that doesn't fit elsewhere. Examples: intellectual property rights, software licenses, goodwill, payment intangibles, contracts. |
| Letter-of-Credit Rights | Rights to payment under a letter of credit. Perfected by control. |
| Commercial Tort Claims | Claims arising from the debtor's commercial activities — such as a business's pending lawsuit against a supplier. Must be described with specificity. |
Proceeds
Proceeds are whatever is received upon the sale, exchange, collection, or other disposition of collateral. If a security interest covers inventory, the accounts receivable generated when that inventory is sold are proceeds. A security interest in collateral automatically extends to identifiable proceeds — the secured party doesn't need to separately describe proceeds in the financing statement (though it is best practice to do so).
How to Write a Collateral Description
The collateral description in a UCC-1 must reasonably identify the collateral. Article 9 sets a low bar for the description standard: a description is sufficient if it reasonably identifies what is described. However, a description in a financing statement (as opposed to a security agreement) may use "super-generic" language — the most common being "all assets" or "all personal property."
| Description Type | Example |
|---|---|
| Super-Generic (Blanket Lien) | "All assets of the Debtor, whether now owned or hereafter acquired, wherever located, including all proceeds thereof." |
| Category-Specific | "All inventory, equipment, accounts, and general intangibles of the Debtor, now owned or hereafter acquired, and all proceeds thereof." |
| Asset-Specific | "One (1) 2024 Caterpillar 320 Excavator, Serial No. CAT0320XXXXX, and all attachments, accessories, and proceeds thereof." |
| For Fixtures | "All HVAC equipment installed at [property legal description], including all replacements, substitutions, and proceeds." |
"All Assets" — The Blanket Lien
In commercial lending, the most common collateral description is a blanket lien using "all assets" language. This is legally permissible under Revised Article 9 for financing statements (though courts have sometimes held it insufficient in the underlying security agreement, which must be more specific).
A blanket lien gives the secured party a perfected claim against substantially all of the debtor's personal property — present and future. This is standard for revolving lines of credit, SBA loans, and asset-based lending facilities.
Important: While "all assets" works for the UCC-1 filing, the underlying security agreement (the private contract) must describe the collateral with greater specificity to create valid attachment. Always confirm with legal counsel./p>
After-Acquired Property
A security interest can cover property that the debtor acquires after the security agreement is signed. This is called an after-acquired property clause and is extremely common in commercial lending — it allows a revolving credit facility secured by inventory to automatically cover new inventory as the debtor acquires it.
There are limits: after-acquired property clauses generally cannot create a security interest in consumer goods acquired more than 10 days after the secured party gives value, or in commercial tort claims.