Double factoring

It happens in a few ways: the same invoice on schedules at two factors, a spot sale of invoices already covered by a whole-ledger factor's lien, or receivables pledged to a merchant cash advance lender and then sold to a factor. Each funder thinks it owns the payment, and only one can get it.

The UCC sets the order. Competing perfected interests generally rank by time of filing or perfection (§9-322), so the factor with the earlier UCC-1 usually has the better claim. The broker, meanwhile, discharges its debt only by paying the assignee that notified it under §9-406, so two NOAs for one carrier usually mean a broker holding payment until the factors sort out who is owed.

Factors can't see each other's schedules, so the practical defenses are UCC searches at onboarding and periodically after, NOA confirmation on every verification call, and the steps in the double factoring guide. General information, not legal advice: priority disputes turn on facts, so involve counsel early.