Last week’s blog post offers some practical ideas of ways secured parties can reduce their UCC filing costs. Continuing the conversation on ways to make cuts from due diligence spending without increasing risk, this week we will answer question, “How can I reduce my costs for lien searching?”
Much of the price associated with lien searching is the cost of labor. Working with an offline service provider can inflate due diligence invoices because you are paying a premium for the service company’s time, energy and resources to perform your search. To drive down costs, try working with a UCC provider that offers a web-based search system. The fees for self-searching on a privately maintained online system are often much lower than those incurred for a comparable offline search.
Take advantage of broad-based name searching
Another advantage of using an online UCC search system is that many incorporate broad-based searching features. This means that the system will allow users to input a truncated search name and/or wildcard characters in order to reveal name variations. Broad-based name searching can reduce search costs by combining associated names of interest onto a single search report rather than paying separately for each. If you decide to use an online search system, make sure to take advantage of its broad-based name searching capabilities.
Be mindful of copy costs
Most public record search companies charge a per page fee for copies of lien documents that accompany your search report. Active names can generate hundreds of dollars in copies that may not even be relevant to your deal. In cases where your search name is common or you anticipate a large number of hits, you may want to order a “listing only” search to start. Then you can review the report and order copies of only those documents that are pertinent to your transaction.
Monitor for liens
If you run periodic searches on your accounts to watch for changes that may impact their ability to repay debts, consider using a lien-monitoring service instead. Account monitoring providers will perform interval searches of your account names and promptly alert you to any new filings or changes to existing obligations. Monitoring services cost only a few dollars each month and offer an inexpensive and convenient way to stay informed.
Be sure to check back next week for the final post in our FAQ blog series!