UCC Liens and Merchant Cash Advances
Most MCA funders file a UCC-1 financing statement. Here's what that filing generally means, how it can affect other financing, and how termination usually happens.
What a UCC-1 filing is
A UCC-1 financing statement is a public notice, filed with a state (often the Secretary of State), that a creditor claims a security interest in certain business assets — frequently receivables or 'all assets.' Other lenders can search these filings.
Multiple filings from different funders can make new financing harder to obtain, because prospective lenders see existing claims on the same assets.
How termination generally works
When an obligation is satisfied, the secured party is generally expected to file a UCC-3 termination statement. Under the Uniform Commercial Code, a debtor can usually make a written demand for termination once there's no remaining obligation. The details depend on state law and your agreement. When resolving any obligation, ask that the written agreement address lien termination.
Common questions
Helpful next reads and tools
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