A Uniform Commercial Code filing, also known as a UCC filing, is a document that lenders use to establish their legal right to assets that a borrower uses to secure a loan. This notice allows the lender to seize the borrower’s collateral in the case of default.
UCC filings can cover a specific piece of collateral, or lenders can file a blanket lien, which applies to all of a borrower’s assets. Filing a UCC lien is a common practice among lenders when they issue small-business loans.
Did you know…
The Uniform Commercial Code is a set of laws that govern commercial transactions across the U.S. These uniformly adopted state laws help promote and simplify interstate business. Article 9 of the Uniform Commercial Code provides guidelines for transactions secured by assets or property, resulting in the term UCC filing.
How does a UCC filing work?
A UCC filing gives a lender the first-position right to claim a borrower’s collateral in the case of loan default. UCC liens are typically…
This article was written by Randa Kriss and originally published on www.nerdwallet.com