Filing offices are not immune from human error. Errors occur in indexing the filing type, and in listing the debtor and secured party names. Whether the error occurred in the original filing, or at the filing office, filers can uncover and correct such errors by ordering a search-to-reflect.
A secured party derives two key benefits from a search-to-reflect. The first is to confirm both the perfection and priority of the filing. A revised Article 9-compliant search-to-reflect will disclose all legally effective UCC filings — that is, all filings that are not considered “seriously misleading” due to incorrect debtor names.
Once the search is conducted, a filer can be assured of its position relative to any other UCC filings on the same collateral. The second benefit is to confirm that the jurisdiction has correctly indexed the debtor, filing type, and secured party names.
For full peace of mind, a search-to-reflect should also include copies of the original filings. This full search gives the original filers and any subsequent searchers the opportunity to correct any errors found in the filings. All lenders benefit from conducting a search-to-reflect, but particularly do SBA lenders — because of the SBA guidelines and guaranty — and creditors who are involved with high-dollar-value or high-risk deals.