A UCC-1 was filed against your business: what it means

A UCC-1 is a one-page public notice, filed with a state office, saying that a named party claims an interest in some property of a named business. It is not a lawsuit, not a judgment and not a lien on anything by itself. It is the way Article 9 of the Uniform Commercial Code lets a funder tell the world, and other funders, that it got there first.

What the form says

Under § 9-502 a financing statement only needs three things to be effective: the debtor’s name, the secured party’s name, and an indication of the collateral. For merchant cash advances the collateral line is usually broad, often “all assets” or a list that covers inventory, equipment, accounts and general intangibles. Filing offices index by debtor name, so the exact legal name on your formation documents is what the funder should have used.

The filing does not state an amount, a payback figure or a remittance. Anyone reading it, including a bank you later apply to, sees only that a funder claims an interest in your assets.

Who may file one

§ 9-509 says a person may file a financing statement only if the debtor authorized it in a signed record. Signing a security agreement that describes the collateral counts as that authorization. Advance agreements nearly always include such a clause, so the funder did not need to tell you separately that it was filing. If you never signed anything with that party, the filing was unauthorized, and the rules below give you a written way to say so.

How long it lasts

A financing statement is effective for five years from filing under § 9-515. The secured party can extend it by filing a continuation statement in the six months before it lapses. A UCC-1 from an advance you finished paying two years ago is still on the record unless someone filed a termination.

Reading what the record shows

• Several active filings, several funders. Each open advance normally has its own UCC-1. Two or more active filings naming different MCA funders is the public footprint of a stack.
• A funder you have paid off still on file. Common, and fixable with a termination (below).
• Amendments and assignments. A UCC-3 can change the collateral, add a party or assign the filing to someone else, so the name on the latest amendment may not be the name you signed with.
• A filing from a party you do not recognize. Check your agreements for a parent, affiliate or servicing entity before assuming it is wrong.

The rights written into Article 9

• Termination on demand. Under § 9-513, when there is no outstanding obligation and no commitment to advance more, the secured party must file or send a termination statement within 20 days after you send a signed demand.
• An accounting within 14 days. § 9-210 lets you send a signed request for a statement of the balance owed or a list of the collateral claimed; the secured party has 14 days to answer, and one request every six months is free.
• An information statement. If you believe the record is inaccurate or was filed without authorization, § 9-518 lets you file your own statement explaining why. It does not remove the filing, but it sits beside it in the public record.
• Statutory damages. § 9-625 provides for actual damages for losses caused by a secured party’s failure to comply with Article 9, plus a fixed $500 for certain failures, including not filing a termination when required.

Where to look

Each state keeps its own registry, searchable by debtor name: Connecticut, Colorado, Oregon, Florida and California are the five Levraq reads weekly; the other states have equivalents. Search the exact registered name and common variants, because a filing under a slightly different spelling can still be found by a careful searcher.

The free Debt Check matches your business against the filings Levraq holds from those five states, shows which ones name MCA funders, and puts them next to your remittance ratio and stack count. A result with no match is not proof that nothing was filed. Nothing here is legal advice; a lawyer in your state can tell you what a particular filing means for you.