A UCC filing is a legal notice a lender files with the secretary of state when they have a security interest against one of your assets. It gives notice that the lender has an interest, or lien, against the asset being used by you to secure the financing. The term “UCC filing” comes from the uniform commercial code.

Who files a UCC-1?

UCC-1 Financing Statements, commonly referred to as simply UCC-1 filings, are used by lenders to announce their rights to collateral or liens on secured loans. They’re usually filed by lenders with the debtor’s state’s secretary of state office when a loan is first originated.

Can you file a UCC-1 without a security agreement?

It should be noted that UCC financing statements filed now generally do not contain a grant of the security interest and generally are not signed or otherwise authenticated by the Debtor and therefore would not satisfy the requirement of a security agreement.

How do I get rid of UCC 1?

Primarily there are two main ways to remove them. One way is by having the lender file a UCC-3 Financing Statement Amendment. Another way to remove a UCC filing is by swearing an oath of full payment at the secretary of state office.

Can debtor file UCC termination?

If you ever find yourself in that frustrating situation the answer is: Yes, you can, providing there is no existing obligation to the lender. This is provided for in Section 9-513 of the Uniform Commercial Code.

What makes a UCC-1 financing statement ” all assets “?

2 Section 9-504 (2) of the UCC permits a UCC-1 financing statement to contain a supergeneric collateral description such as “all assets” of the debtor.

Where does a UCC filing come from for a business?

Where a UCC Filing Comes From. A UCC filing begins when borrowers agree to pledge assets to a lender for a loan or business line of credit by signing a security agreement. A security agreement gives the lender the right to use specific assets as collateral.

What happens if you have a UCC lien on an asset?

Having one filed against your business’ assets only limits you a bit, since it prevents you from putting those assets up as collateral for another loan. Remember: as long as an asset has a UCC lien filed against it, you’re not allowed to transfer, sell, or use it as collateral for any other loan. How do I get rid of a UCC lien?

How does a UCC file affect your borrowing power?

1. It can impact your borrowing power The most significant impact a UCC filing can have on your business is connected with its very purpose: because a lender already has a lien on all or some of your possible collateral, it will likely be hard– if not impossible– to obtain any kind of secured financing from a lender.