What do you need to know about a UCC lien?

UCC LIENS. What is a UCC lien? UCC is an acronym for “Uniform Commercial Code.” It is law that was established in 1952 as part of the federal interstate commerce laws so that the states and U.S. territories that adopt the code have a uniform set of rules by which interstate business activities are governed in America.

What do you need to know about a UCC filing?

A Uniform Commercial Code (UCC) lien filing, or UCC filing, is a notice lenders file to stake a claim in borrower assets in the event of default. UCC liens can cover all or specific assets, and can be filed against businesses or individuals. The term comes from rules governing commercial transactions in the United States.

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

Lenders can’t file a UCC-1 without a security agreement from the borrower. A lender may file an initial statement only if the debtor allows the filing in an authenticated record or by authenticating a security agreement. If a lender issues a UCC-1 filing without borrower approval, its best to consult an attorney.

How long does it take to terminate a UCC-1 lien?

Sometimes it could take one to six weeks to get the termination of the old UCC-1 liens finalized, which could flat out deny your ability to close on your financing arrangement. As a result, due diligence should be done before you apply for financing to make sure your business has no UCC-1 filings still active for debt obligations already paid.

Where does a UCC-1 lien need to be filed?

In cases where the collateral is tied to a specific physical property rather than financial assets, the UCC-1 is filed in the county where the physical property is located. The UCC-1 becomes a public record, allowing potential creditors to see whether a given property is already pledged against an existing lien.

What do you need to know about UCC filings?

A UCC filing is a public notice of a secured transaction. A financing statement indicates a commercial agreement between a debtor and a secured party. Filing with this office serves to perfect a security interest in named collateral and establish priority in case of debtor default or bankruptcy.

Lenders can’t file a UCC-1 without a security agreement from the borrower. A lender may file an initial statement only if the debtor allows the filing in an authenticated record or by authenticating a security agreement. If a lender issues a UCC-1 filing without borrower approval, its best to consult an attorney.

What does the UCC Uniform Commercial Code mean?

Ucc Uniform Commercial Code (UCC) A UCC filing is a public notice of a secured transaction. A financing statement indicates a commercial agreement between a debtor and a secured party.