Summary. A loan closing is a documentary exercise in which the lender's collateral position is created and the borrower's obligations are fixed, and nearly everything that goes wrong later traces to a step skipped or deferred here. A financing statement filed against a slightly wrong debtor name is an unperfected lien. A control agreement the depository bank never signed is no control at all. A landlord waiver deferred to post-closing is a waiver that never arrives. This checklist runs the closing in sequence: organizational and authority documents, credit and security documents, perfection by collateral type, the third-party deliverables that take longest and are started last, insurance and opinions, the funds flow, and the post-closing items that must be tracked to completion.

What this checklist is for. Closing a secured commercial loan, from either side. For the negotiation that precedes it, see Negotiating a Commercial Loan Term Sheet.

Phase 1 — Start the long-lead items on day one

The negotiation does not determine the closing date; these do.

  • Lien and litigation searches — UCC, tax lien, judgment, and bankruptcy searches in every state of organization and every state where collateral is located, plus a search of the borrower's prior names and any predecessor entities.
  • Payoff letters from every existing secured lender, with wire instructions and an agreement to deliver UCC-3 terminations and mortgage releases.
  • Landlord waivers for every leased location holding collateral, and bailee letters for collateral at a warehouse, a processor, or a consignee. These require a third party's cooperation and are the single most common cause of a delayed closing.
  • Deposit account control agreements and securities account control agreements, which require the depository or intermediary's signature and its own internal approval process.
  • Appraisals, field examinations, environmental site assessments, and surveys where real property is collateral.
  • Title commitment and the requirements to clear exceptions.
  • Insurance certificates with the required endorsements, which brokers frequently issue incorrectly the first time.
  • Flood determination and, if in a special flood hazard area, flood insurance in the required amount.
  • Third-party consents — franchisors, licensors, and counterparties to material contracts with anti-assignment provisions.
  • Regulatory approvals where the borrower is licensed.

Phase 2 — Organizational and authority documents

For the borrower and each guarantor:

  • Certified charter documents — articles or certificate of incorporation, formation, or organization, with all amendments, certified by the secretary of state.
  • Bylaws or operating or partnership agreement, with all amendments, certified by an officer.
  • Resolutions of the board, members, or partners authorizing the loan, the grant of security, the guaranty, and the execution and delivery of the documents — and confirming that no consent beyond those obtained is required.
  • Incumbency certificate with specimen signatures of each signing officer.
  • Good standing certificates from the state of organization and every state of foreign qualification, dated recently.
  • Confirm the borrower's exact legal name as it appears in the public organic record, character for character — this is the name the financing statement must use, and a discrepancy renders the filing seriously misleading and the lien unperfected.
  • Confirm the state of organization, which determines where the financing statement is filed.
  • Confirm the capitalization and ownership, and identify anyone whose consent or joinder is needed.
  • Confirm every subsidiary required to be a guarantor is joined and that its assets are pledged, including any formed since the last financing.

Phase 3 — Credit and security documents

  • Credit agreement or loan agreement, with the representations, covenants, events of default, and conditions precedent negotiated at the term sheet stage.
  • Promissory note or notes.
  • Security agreement, with a collateral description sufficient to create the interest and a separate description sufficient for the financing statement.
  • Pledge agreement for equity interests, with original certificates and undated stock powers or transfer powers executed in blank delivered to the lender, and — for uncertificated interests — the issuer's acknowledgment or a control agreement.
  • Guaranties, and where they are limited, confirm the cap, the release conditions, and whether liability is joint or several.
  • Mortgage or deed of trust, with the correct legal description, and an assignment of leases and rents where applicable.
  • Intellectual property security agreement, for recording with the Patent and Trademark Office and the Copyright Office.
  • Intercreditor or subordination agreements with any other secured party or subordinated lender.
  • Collateral assignment of key contracts, licenses, or life insurance where required.
  • Environmental indemnity, which typically survives repayment and is not subject to the loan's limitations.
  • Fee letter, and confirm the fees are consistent with the term sheet.
  • Confirm the borrowing base certificate, if applicable, is delivered and supports the initial funding.
  • Confirm the schedules and exhibits are complete — the disclosure schedules are where the representations are qualified, and blank schedules mean unqualified representations.

Phase 4 — Perfection, by collateral type

Getting this wrong is the failure that surfaces years later, in a workout.

  • General intangibles, accounts, inventory, and equipment — file a UCC-1 in the state of the debtor's location (its state of organization for a registered organization), against the exact legal name, with a sufficient collateral description.
  • Confirm the filing is accepted and obtain the acknowledgment; a rejected filing perfects nothing.
  • Calendar the five-year lapse and the six-month continuation window, because a lapsed financing statement is an unperfected lien retroactively.
  • Deposit accounts — perfection is by control only, through a control agreement signed by the depository, or by the lender being the depository. A security agreement alone perfects nothing in a deposit account.
  • Securities and investment property — control agreements or delivery of certificates.
  • Certificated equity interests — physical delivery of the certificates with executed powers.
  • Titled goods — vehicles, trailers, aircraft, and vessels — perfected by notation on the certificate of title or by filing with the applicable federal registry, not by UCC filing.
  • Real property — record the mortgage or deed of trust in the correct county, and confirm recording.
  • Fixtures — a fixture filing in the real property records.
  • Intellectual property — record the security interest with the USPTO for patents and trademarks and with the Copyright Office for registered copyrights, in addition to the UCC filing.
  • Commercial tort claims — a specific description is required; a generic reference perfects nothing.
  • Letter of credit rights — control through the issuer's consent.
  • Purchase money priority — confirm the notification and timing requirements are met where applicable.
  • Collateral in other states — confirm what additional filings each location requires.
  • Run post-filing searches to confirm the lender's filing appears and that no intervening filing has priority.

Phase 5 — Insurance, opinions, and the funds flow

  • Property insurance in the required amount, with the lender as loss payee and, for real property, with a standard mortgagee clause — which protects the lender even where the borrower's conduct would void coverage.
  • Liability insurance with the lender as additional insured where required.
  • Business interruption, flood, and any specialty coverage the loan documents require.
  • Notice of cancellation to the lender, and confirm the endorsement actually says so.
  • Key person life insurance with a collateral assignment where required.
  • Legal opinion from borrower's counsel — due organization and good standing, power and authority, due authorization and execution, enforceability, no conflict with organizational documents or material agreements, no required consents, and — where requested — perfection and priority opinions, which are narrower and more expensive than they appear.
  • Solvency certificate from an officer.
  • Officer's certificate confirming the representations are true and no default exists.
  • Closing funds flow — sources and uses, agreed in writing in advance, with payoff amounts confirmed by per-diem and wire instructions verified by callback to a known number, because payoff wire fraud is a real and recurring loss.
  • Confirm fees and expenses are paid or netted, and that the borrower has seen the invoice.
  • Confirm the conditions precedent in the credit agreement are each satisfied or expressly waived in writing.
  • Confirm the closing date, funding date, and effective date are consistent across documents.

Phase 6 — Post-closing

  • Circulate the closing set — a complete indexed set of executed documents, to every party.
  • Confirm recordings are returned and UCC acknowledgments received.
  • Confirm the prior lenders' terminations are filed and that the searches now show only the new lender.
  • Track every post-closing covenant with a deadline and an owner — landlord waivers, control agreements, title endorsements, and any consent not obtained at closing. Post-closing items with no tracker are post-closing items that never happen, and each one is a default.
  • Calendar the reporting obligations: financial statements with their deadlines, compliance certificates with covenant calculations, borrowing base certificates, budgets, and insurance renewals. The most common event of default in a healthy company is a late financial statement nobody calendared.
  • Calendar the covenant test dates and run the calculations internally before the certificate is due.
  • Calendar the UCC continuation dates, five years out.
  • Calendar the insurance renewal and confirm the endorsements are reissued each year.
  • Confirm the borrower's obligations on new subsidiaries and new collateral — most credit agreements require joinder and additional filings within a defined period after formation or acquisition.
  • File the closing binder where it can be found, because the next transaction, the next workout, and the next diligence will all begin with it.

Common mistakes

  • A financing statement against the wrong debtor name, which is the most consequential clerical error in secured lending.
  • Filing in the wrong state, because the debtor's location was assumed rather than confirmed.
  • A security agreement in a deposit account with no control agreement, perfecting nothing.
  • Titled goods perfected by UCC filing, which does not work.
  • Commercial tort claims described generically.
  • Deferring landlord waivers and control agreements to post-closing, where they are never obtained.
  • No UCC-3 terminations from prior lenders, leaving stale filings ahead of the new lien.
  • Insurance certificates without the actual endorsements.
  • Payoff wires sent to instructions received by email, without callback verification.
  • No post-closing tracker, so each deferred item becomes a default.
  • No calendar for continuations, so the lien lapses in year five.

Primary authority

  • UCC Article 9, as enacted in the applicable state, including § 9-102 (definitions), § 9-108 (sufficiency of description), § 9-109 (scope), § 9-203 (attachment), § 9-301 through § 9-307 (choice of law and debtor location), § 9-310 through § 9-316 (perfection, including control and possession), § 9-317 through § 9-339 (priority), § 9-501 through § 9-527 (filing, including § 9-503 on the debtor's name and § 9-506 on errors that are seriously misleading), and § 9-515 (duration and continuation).
  • UCC Article 8 for investment property and control.
  • Federal recording regimes: 35 U.S.C. § 261 (patent assignments), 15 U.S.C. § 1060 (trademark assignments), 17 U.S.C. § 205 (copyright transfers), 49 U.S.C. § 44107 (aircraft), and 46 U.S.C. § 31321 (vessels).
  • Real property recording and mortgage law, which is state and county specific.

Related

This checklist is educational and not legal advice. Perfection and priority rules are state-specific and collateral-specific, and real property and federal recording requirements vary. Consult qualified finance counsel before closing a secured loan.