The Uniform Commercial Code (“UCC”) establishes a standard for recording liens that protect the financial interests of creditors. A UCC filing or UCC lien is a legal notice that creditors file in state courts to publicly protect their interest in property.
These UCC filings can also affect your business credit, or your ability to get financing for your business. That’s why understanding the UCC filing rules in your state can be helpful.
When you pledge security for a loan, the lender may file a lien to protect the asset(s) pledged. In the case of a small business loan or financing, secured transactions might require pledging inventory, accounts receivable, or a piece of equipment. Some creditors will place a blanket lien naming all the assets of the business.
State UC Filing Rules
Each state maintains records through the Secretary of State, The Uniform Commercial Code Division, Central Filing Office, or something similar. These offices operate a filing and retrieval center for UCC financing statements at the state level.
These offices may also accept state and federal tax liens for filing.
Here is a list of UCC filing rules for every state. Use these links to get information about each state’s UCC filing system, filing fees, and filing requirements:
Frequently Asked Questions (FAQs)
What does UCC stand for?
UCC stands for Uniform Commercial Code. It’s called the Uniform Commercial Code because the same national UCC law applies in all U.S. states.
What are the types of UCC forms?
There are several types of forms that may be involved in a UCC filing.
UCC Filing Statement (or UCC-1) This is the initial filing that creates a lien filing in the system.
UCC 1a: Financing Statement Addendum: offers fields for an additional debtor, secured party and collateral.
UCC 1ap: Financing Statement Additional Party: form that provides for multiple additional debtors and secured parties.
UCC 3: Financing Statement Amendment: amends previously filed liens, including assignments (full or partial assignments of interest in collateral), continuations, and terminations.
UCC 3a: Financing Statement Amendment Addendum: offers fields for additional collateral.
UCC 3ap: Financing Statement Amendment Additional Party: adds additional debtors and secured parties.
UCC 11: Search Request: provides copies of liens, certified copies or listing of debtors by name or lien number.
UCC 5: Information Request (Correction Statement): allows debtor or secured party to dispute a filing.
Can I do a UCC search for my business?
UCC filings are often listed on business credit reports, so one way to check if there are any UCC filings is to review your business credit reports.
UCC filings often appear on business credit reports. But even if they don’t, lenders may still access that information through the public record. You may need to check with the state where the UCC filing was placed to get more information. There may be a fee for this check.
Typically a UCC search will include the initial file number, debtor name(s), secured party name(s) and any subsequent filings associated with the initial financing statement.
What is a UCC financing statement?
A UCC-1 Financing Statement (also called a UCC-1 Form) is filed by creditors to provide public notice that they have a security interest in property of a debtor.
What does it mean to “perfect a lien”?
A perfected lien refers to one that is filed correctly. A creditor or other person authorized by the debtor (the “filer”) perfects a lien by filing a UCC Financing Statement that includes the name of the debtor, the secured party’s name, collateral description, and any other required information.
In many states, online filing is available.
How long does a UCC filing last?
A UCC-1 protects a lender’s interests for five years unless the lender refiles it. Many creditors will monitor the lapse date so they can refile to continue to protect their interest in the property. This is usually done with a UCC3 form and usually continues the originalfinancing statement for five more years.
What if a UCC filing is wrong?
If you find a UCC filing on your business credit report and you don’t believe it is correct, you’ll need to try to get it removed or corrected. Here’s how to remove a UCC filing.
Do UCC filings affect business credit?
While UCC filings aren’t negative in and of themselves, they can make it more difficult to qualify for some small business loans or financing. If lenders see “excessive” numbers of UCC filings, that may affect whether they will extend more financing.
What are UCC scams?
Several state attorneys general are warning individuals and businesses about UCC scams. For example, the Tennessee Attorney General warned:
“The scam mailer, Tennessee UCC Statement Request Form, tries to get Tennesseans to pay $107 for the TN UCC Statement Service to request a copy of the UCC-1 financing statement on behalf of the debtor. The mailer implies that the recipient needs a copy of the UCC-1 financing statement. This is rarely the case.”
The Tennessee AG encourages individuals who do need a copy of the UCC-1 filing to go directly to their site to order it for just $15.
Other states have warned of similar scams. If you receive a notice that you need to pay a fee for UCC filing information, be sure to check with your state authority using the UCC filing state rules resource listed above.
This article was originally written on February 14, 2024.
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