What does it mean when someone has a UCC filing?

UCC filing FAQs A UCC-1 filing is a legal form that a creditor files to secure its interest in a borrower’s property or assets used as collateral for a loan. The filing serves as a public notice that the creditor has the right to take possession of the assets as repayment on the underlying debt.

What is a UCC filing on my home?

Essentially, a UCC-1 can be described as a financing statement. A creditor files a UCC-1 to provide notice to interested parties that he or she has a security interest in a debtor’s personal property. This personal property is being used as collateral in some type of secured transaction, usually a loan or a lease.

What does a UCC filing protect?

Filing a UCC-1 allows creditors to collateralize or “secure” their loan by utilizing the personal property assets of their customers. In the event of the customer defaulting on their loan or filing for bankruptcy, a UCC-1 elevates the lender’s status to a secured creditor, ensuring they will be paid.

What are the different types of UCC filings?

Types of UCC filings

• UCC Lien Against Specific Collateral. When a lender files a UCC lien against specific collateral, the lender secures interest in one or more assets but not against all company assets.
• Blanket UCC Filing.
• Impacts Business Credit.
• Prevents Use of Collateral for Other Loans.
• Puts Collateral at Risk.

Are UCC filings bad?

Having a UCC filed on your business credit report can have negative effects in general on your overall credit risk, scoring and other associated risk analysis, (across all three business credit bureaus) and can even kill your chances at getting financing for your business.

What is UCC filing termination?

A UCC-3 termination statement (a “Termination”) is a required filing that terminates a security interest that has been perfected by a UCC-1 filing. A Termination for personal property is accomplished by completing and filing form UCC-3 with the Secretary of State’s office in the appropriate state.

Who files a UCC termination?

Generally, for non-consumer goods, the UCC requires that a new secured party cause an existing secured party to file the Termination within 20 days after a secured party receives an authenticated demand from a debtor and there has been payoff in full of the obligations to the existing secured party and cessation of any …

Does SBA file UCC?

SBA files a UCC-1 general security interest against non-real estate business assets.

How long is a UCC termination good for?

UCC – Frequently Asked Questions – UCC-1 and UCC-3. Most filings last for five (5) years from the date of filing. Filings for a debtor that is a transmitting utility have no expiration date. Manufactured Home filings last 30 years from the date of filing – appropriate box must be marked.

How do I remove a SBA UCC filing?

Ask the lender to terminate the lien upon payoff. When you pay off a loan, a good rule of thumb is to immediately submit a request with the lender to file a UCC-3 form with your secretary of state. The UCC-3 will terminate the lien on your company’s asset (or assets) and remove the UCC-1 filing.

Does EIDL loan have UCC filing?

EIDL loans under $25,000 are considered “unsecured” and do not require any collateral. EIDL loans over $25,000 will require collateral. The SBA secures collateral by filing a blanket UCC-1 lien on your business.

What is a blanket UCC lien?

A blanket lien gives the right to a lender to seize all pledged assets owned by a debtor in the event of a default. Blanket liens provide maximum protection to lenders but minimum protection to borrowers. The Uniform Commercial Code (UCC) regulates blanket liens, particularly through UCC Article 9.