.png?height=120&name=BridgeHaul_Final_Logo_Hi_res%20(1).png){kind=logo}
Understanding the UCC filing process and how to get past UCC filings removed.
What is a UCC-1 Filing
A UCC filing, also known as a UCC lien or a UCC-1, is a financing statement which lenders can file against your business with your secretary of state. When you take out a secured loan, the lender may file a lien to protect the asset(s) you committed to secure financing.
UCC liens aren’t unusual in the world of business financing and, unlike liens on your personal credit, a UCC filing doesn’t indicate that you’ve done anything wrong. Nonetheless, future lenders might be hesitant to approve applications for additional credit until you satisfy your existing lien(s).
Why? Because an existing UCC-1 filing may increase your company’s credit risk from a lending perspective. It signifies that you already owe money to another lender and that your assets are already committed to someone else.
This is an important consideration because the lender with the oldest UCC-1 filing legally has the first claim on the assets. In the event of default, the lender who submitted the second UCC filing would only be able to recuperate funds from the sale of any collateral after the first lender has had the opportunity to do so.
How do I remove a UCC filing
Option 1: 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.
Option 2: Request a Buyout
If you are moving from another factoring company to BridgeHaul, you can request a Buyout where we will enter into an agreement to assign all outstanding receivables to BridgeHaul and BridgeHaul will payoff the outstanding amount owed directly to the past factoring company.
Option 3: Visit your secretary of state’s office.
If your lender fails to file a UCC-3 form after you satisfy a debt, another option you may consider is making the request yourself. To do so you will generally need to make a trip in person down to your secretary of state’s office. Once there, you will be able to swear under oath that you’ve satisfied the debt in full and wish to request for the UCC-1 filing to be removed.