Glossary · Factoring
UCC-1 financing statement
Also called: UCC-1, UCC filing, Financing statement, Lien filing
Definition
A UCC-1 financing statement is a public filing, usually with a state's secretary of state, giving notice that a lender or factor claims an interest in a debtor's assets.
Article 9 covers sales of accounts as well as loans against them (§9-109), so factors file UCC-1s to perfect their purchase of a carrier's invoices. Under §9-502, a filing needs only the debtor's name, the secured party's name and an indication of the collateral, such as all accounts. The carrier authorizes it by signing the factoring or security agreement (§9-509).
Priority among competing perfected interests generally goes to whoever filed or perfected first (§9-322). A UCC-1 stays effective for 5 years and lapses unless a continuation is filed in the 6 months before it expires (§9-515). For a registered organization such as an LLC, file and search in its state of organization (§9-307).
See UCC searches before funding. General information, not legal advice: filing rules vary by state, so confirm with counsel.
Sources
- 01UCC §9-109: Scope (sales of accounts) · Cornell LII
- 02UCC §9-307: Location of debtor · Cornell LII
- 03UCC §9-322: Priorities among conflicting security interests · Cornell LII
- 04UCC §9-502: Contents of financing statement · Cornell LII
- 05UCC §9-509: Persons entitled to file a record · Cornell LII
- 06UCC §9-515: Duration and effectiveness of financing statement · Cornell LII