Financial services companies face a number of risks when taking equipment as collateral for a loan. The borrower may:

• not have good title to the item;

• use false insurance to secure finance;

• secure finance with equipment that doesn’t exist;

• sell the item that is securing the loan;

• export the item and then sell and/or claim the item to be stolen;

• seek to use the item to secure collateral with more than one institution.

These risks are mitigated through the use of UCC1 filings and searches. NER is developing tools that will provide financial services companies an additional layer of security to existing UCC1 services.

Search Service.

Finance companies may request searches of the NER database prior to agreeing to a loan. By searching the NER database of stolen equipment before a loan is made on used equipment, a lender can significantly reduce the risk of making a loan against items that are not the clear property of the borrower.

Recovery Service.

Finance companies may register equipment that is linked to a bad debt or that has been stolen. The chances of locating these items will be significantly enhanced, as NER will include these items when carrying out searches of used equipment sales or searches for law enforcement.

Read more about NER’s Operations