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Training Guide

Security Interests and Perfection


Training Guide

Security Interests and Perfection

Commercial Lending
Remote or in person

What’s Covered

  • Voluntary vs. involuntary liens
  • Creating a security interest
  • Attachment under Article 9 
  • Perfection under the UCC
  • Lien priority
  • Perfection outside the UCC
  • UCC-1 financing statements
  • UCC-3 post-filing actions

Before the Session

Prepare the Attendees

Send the attendees an invitation for the session. Include this link, which has the videos and exercise they’ll need to prepare.

Prepare Yourself

Watch the videos and read the exercise so you’re familiar with the Hotshot material.

  • still frame from Secured Loans and Security Interests


    Security Interests and Perfection

    A look at security interests, including different types of collateral, how security interests are created through attachment, the perfection process, and lien priority. This course also includes an introduction to Article 9 of the UCC.

  • still frame from Perfection by Filing Under the UCC


    UCC Financing Statements

    A look at filing under the UCC, including a close look at a UCC-1 financing statement. This course also covers extension, modification, and termination of a financing statement by filing a UCC-3.

During the Session

Part 1: Knowledge Check
Ask attendees these questions to ensure they understand the topic:

  • What is a security interest? What are some other terms for a security interest? 
  • What’s the difference between a voluntary lien and an involuntary lien? Are secured loan transactions voluntary or involuntary?
  • Under Article 9, what are the three requirements for attachment?
  • What are the four ways to perfect a security interest under Article 9? 
  • What is the first-in-time rule? What are the exceptions to the rule?
  • With which types of assets do you need to look outside the UCC for the rules on attachment and perfection? 
  • What must be included in a financing statement for it to be considered “sufficient” under Article 9? 
  • Does the debtor need to sign a financing statement to authorize its financing? 
  • Why do lenders sometimes file a UCC-3 when they assign or transfer a loan and security interest to another lender? 
Part 2: Group Exercise
Lead a group discussion based on the exercise. To encourage collaboration, divide the attendees into groups to discuss the exercise, then have a representative from each group summarize their views to the larger group. Call on people to share their thoughts and ask others to respond.
Tip for remote sessions: use your web conferencing system’s breakout room feature to divide people into groups.
Part 3: War Stories and Firm Specifics
Share your own experiences and guidance, including:

  • Anecdotes and war stories (e.g., about a near-disaster or a tough negotiation)
  • General practice tips (dos and don’ts)
  • Firm-specific guidance and practices

After the Session

To continue their learning, attendees can check out related courses in Hotshot’s Commercial Lending topic.

About Hotshot

Hotshot helps lawyers develop their legal, business, and technology skills through short videos, quizzes, and summaries, and we help law firms and law schools plan and deliver engaging training programs. Our customers include Am Law 200 firms, top law schools, and regional and international firms.

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