A lender's claim on business assets other than real estate, made public by filing a financing statement under Article 9 of the Uniform Commercial Code.
A mortgage is recorded against land. For everything else a business owns, such as equipment, inventory and receivables, the public record is a financing statement, often called a UCC-1. Under the uniform text of Article 9, a financing statement must be filed to perfect most security interests, which is what gives the lender priority over later creditors. Each state has enacted its own version, so check your state’s wording.
Three facts matter when you seek a loan. First, a filed financing statement is effective for five years from the date of filing. Second, a lender can keep it alive by filing a continuation statement, but only in the six months before those five years end. Third, apart from fixture filings and a few other cases that go to the real estate records, filings go to the state’s central filing office.
A new lender will search those records early. An old filing from a loan you paid off still shows until it is terminated, and it can stall a closing. Ask the former lender to file a termination, and find out about any filing you do not recognize before a lender does.
How it shows up in the data here
UCC filings are kept by each state's filing office, usually the secretary of state, and are not part of the federal files used here. This site does not show liens on any borrower. It shows the lenders: who holds business loans at business lenders and who made SBA loans at SBA 7(a) lenders. To see filings against your own company, search your state's UCC records.
Go further
- Business lenders by state: Lenders holding business loan balances.
- Sources: Which public files this site uses.
- Equipment financing package checklist: Equipment is the simplest thing a business borrows for. There is a price, an invoice and a machine the lender can take back. The package is short, and the choices are about term, lien and who the lender is.
- Business line of credit package checklist: A line of credit pays for the gap between spending money and collecting it. The lender wants to see that the gap is real, that it closes, and what it can take as collateral while it is open.
- What a lender-ready loan package looks like: A lender decides in minutes whether to keep reading. A package that answers the first five questions on one page, and backs each answer with a document, gets read.
Related terms
- Blanket lien: A security interest that covers all or nearly all of a borrower's assets, present and future, instead of one named piece of collateral.
- Equipment financing: A loan used to buy business equipment, secured by that equipment and repaid over a term tied to how long the equipment will be useful.
- Borrowing base: The most a lender will advance on a line of credit at a given time, set as a percentage of the eligible receivables, inventory or other collateral pledged.
- Line of credit: A commitment from a lender to advance money up to a set limit, which a business can draw, repay and draw again as its cash needs rise and fall.
- Cross-collateralization: An arrangement in which two or more properties or assets secure the same loan, or each secures the borrower's other loans, so the lender can look to any of them if one loan defaults.
- SBA collateral requirements (7(a)): SBA's rules for what a 7(a) lender must take as collateral and how each asset counts, such as improved real estate at 85 percent of value. A request must not be declined only for thin collateral.
Sources
- Uniform Commercial Code 9-310, When filing required to perfect security interest (as enacted in the District of Columbia, D.C. Code title 28, article 9; each state enacts its own version), retrieved .
- Uniform Commercial Code 9-515, Duration and effectiveness of financing statement (as enacted in the District of Columbia; each state enacts its own version), retrieved .
- Uniform Commercial Code 9-501, Filing office (as enacted in the District of Columbia; each state enacts its own version), retrieved .
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.