Perfection is the act of taking the legally required steps to be secured in its collateral position. The steps you take vary depending on the type of collateral. In many states, a [[Promissory Note | promissory note]] is secured by a [[Deed of Trust]] on [[Unfiled/Real Estate]]. Deeds of trust must be filed in public records of the county where the [[Collateral]] is located. For [[Equipment | equipment ]] with titles, such as rolling stock (vehicles), the bank's must file a lien with the county in which the vehicle is registered, and that the vehicle's title must include the bank as the lien holder and the bank must hold the original title. For non titled [[Equipment]], [[Inventory]] or [[Accounts Receivable]], a UCC must be filed. Also, A [[UCC ]] search should be obtained as part of [[Underwriting]]. Securing the Bank's Interest in Collateral is the process of [[Perfection]]. # Types of Perfection: #### [[UCC]] Filings #### [[Deed of Trust]] or [[Mortgage]] #### [[Possession]] ## Other Security Interests: Auto loans, [[Yachts, Boats or Vessels | boat loans]], and [[Aircraft Loans | aircraft loans]] require filings with specific entities.