What Is A Ucc Filing & How Does A Ucc Lien Work?

UCC filings are a matter of public record and can be searched by anyone. The document that is filed is often called a UCC filing, UCC-1 statement, UCC lien, or a UCC financing statement. Whatever it’s called, the document and the filing process are the same no matter what state you’re in. A UCC lien protect sellers of goods from nonpayment by providing a security interest in a borrower’s personal property. If the borrower fails to pay, the seller has the right to repossess the property listed as collateral in the filing. If you see a fulfilled UCC lien still listed on your business credit report, you can contact your lender to ask them to properly close the lien.

What Is A Ucc Filing & How Does A Ucc Lien Work?

A UCC filing, also known as a UCC lien or a UCC-1, is a financing statement which lenders can file against your business with your secretary of state. When you take out a secured loan, the lender may file a lien to protect the asset you committed to secure financing. This might be a piece of equipment, a vehicle, property, or even a blanket lien naming all your assets. However, UCC filings from the past five years show up on a business’ credit report. This means future lenders can see existing loan balances, payment histories and liens—and this information may impact lending decisions.

What Is A UCC Search? What You Need To Know

The UCC, in particular, aims to streamline rules applicable to commerce and commercial contracts. This post is to be used for informational purposes only and does not constitute What Is A Ucc Filing & How Does A Ucc Lien Work? legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

What is a NC UCC statement request form?

The UCC-1 is a form used in an initial filing of a financing statement. According to G. S. 25-9-402, a financing statement must contain the following information: Secured party's name and address. Debtor's name and address.

A UCC filing against those assets involves some risk to you as a business owner, so weigh that risk carefully and explore all your options before you commit to this type of funding. The filing should indicate whether the debtor is an individual or an organization, along with basic information about the debtor organization if applicable. With specific collateral, if the item is destroyed or has lost value, it may not cover the loan. However, with a blanket lien, the lender can recover multiple items up to the value of the loan, giving the lender protection that a specific lien cannot. After a loan has been paid off, a borrower has the responsibility of asking the lender to remove the UCC filing on the loan. The Department of State’s Uniform Commercial Code Division accepts MasterCard, Visa and American Express for the payment of certain fees.

About the Uniform Commercial Code

For example, if a small business uses its building or land to secure a loan, the creditor could file a UCC-1 financing statement to perfect its security interest in the land. The creditor who files a UCC-1 filing establishes https://kelleysbookkeeping.com/ the priority with which the creditor will be paid in the event the debtor defaults or in the event the debtor files for bankruptcy. Financing statements are filed as a public notice of a security interest in collateral.