When I was a young man, I loaned — with great fear and hesitation — my favorite Transformers toy to my best bud across the street. Looking back, I should have drafted up an agreement clarifying my ownership of said property (“Vintage G1 Optimus Prime”), stating the terms of our loan agreement. If I only knew about UCC filings back in 1987.
With no documentation to prove my ownership and loan terms regarding said toy, and no legal leg to stand upon, Optimus Prime was never to be seen again.
Two key takeaways from this sad tale: 1. Never do business with close friends and relations. 2. Public documentation of purchase agreements are a powerful thing.
Financing statements are, of course, a great thing for creditors. But public notices like UCC filings also provide valuable insight for savvy sales and marketing people looking for legit leads.
Running Down a Lead
When a lender completes a financing agreement with a debtor, the lender files a UCC-1 form with the Secretary of State where the debtor resides. Doing so notifies lenders, dealers, and others that there is a security interest on a piece of collateral (a dozer, backhoe, or totally sweet and irreplaceable vintage Optimus Prime, etc.).
The collateral is secured once the lender files the UCC-1 form, which has a file number, the debtor’s organization name and address (along with an owner name when appropriate), the secured party’s name and address, and a description of the collateral covered.
Monitoring state or nationwide UCC data is a clever way to find new prospects. UCC data can help you run down new leads by discovering active buyers. That’s a gateway to great marketing.
Improve Marketing Results
UCC data can help your marketing team segment target audiences by equipment age and type. This sets you up for sending timely direct mail, or making phone calls to prospects with promotions that are relevant to their needs.
Knowing a buyer’s purchasing history and financing activity, you can find ready prospects in your niche market. This information helps you hyper-target your sales and marketing efforts by focusing on proven buyers of the type of equipment you sell. Gather data for a sustained period of time and you can start predicting purchasing behavior based on the typical financing period for the equipment you sell. For example, if you were to capture a finance transaction four years ago, and you know the typical financing term for that equipment is 60 months, you could infer the buyer’s financing is about to expire.
But the big question is, how do you gather all this UCC data, confirm its accuracy, and ultimately use it to your advantage?
The Limits of UCC
You can find UCC data yourself on the Secretary of State website for each state. Some states are more efficient than others, with varying degrees of timeliness for the uploading of data. It’s a mixed bag.
You can search for state-by-state UCC data all day long but it’s incredibly tedious and time consuming. Search filters are limited, which makes finding filings that pertain to you and your business difficult. Some states still use archaic methods like microfiche to disseminate information.
Consider these other limitations of UCCs.
The only contact info you’ll see is an address, and the only person listed is usually a CFO (which means your only contact option is direct mail, and the only name you’ll have is not an ideal point person).
The other main issue is manpower and time. As in, it takes a lot of each to sift through UCC forms to find good prospects. You can’t search for specific equipment codes or model numbers, so it’s a painstaking process to wade through an ocean of documents looking for something relevant to your business.
UCC filings also lack historical data, and credit risk details, so it’s extremely difficult to integrate such isolated information with any sort of marketing effort.
Add on top of this a lack of access to machines needed to process and receive UCC-1 data, and that’s a lot to consider. The best case scenario is to find a data platform that does all the hard work for you. That’s the best way to use UCC data to boost your sales and marketing.