Resources 2


What is a UCC-1 Financing Statement?

A UCC-1 Financing Statement is a legal form used in the U.S. under the Uniform Commercial Code (UCC). Its primary purpose is to provide the public with notice that a creditor has an interest in the personal or business property of a debtor. The property that is the subject of the UCC-1 filing serves as collateral for a secured transaction, such as a loan.

Why Do Banks File a UCC-1?

When a company takes out a commercial loan, banks or other lending institutions often require some form of security. This security ensures that, should the borrower default on the loan, the bank can seize and sell the assets mentioned in the UCC-1 to recover some or all of the money owed in accordance with legal process or contractual agreement.

Filing a UCC-1 statement accomplishes the following:

  1. Perfection of Security Interest: Simply having a security interest in collateral isn’t always enough. By filing a UCC-1, a bank “perfects” its security interest, giving it priority over future lenders or creditors claiming an interest in the same property.
  2. Public Notice: UCC-1 statements warn other potential creditors that a debtor’s specific property is already pledged as collateral, making it less likely that multiple lenders will have conflicting claims on the same property.
  3. Enforcement: In case of a default, the lender can use the UCC-1 as evidence of their claim on the property and proceed with appropriate remedies, such as repossession.

What This Means for Your Business

If you’re considering taking out a commercial loan:

  • Expect a UCC-1 Filing: If the loan is secured by your business assets, anticipate the bank will file a UCC-1 statement. Before agreeing, you should understand which assets are being used as collateral.
  • Check Existing UCC-1 Filings: Before pledging certain assets as collateral, it’s wise to ensure no other UCC-1 filings are already associated with those assets. Overlooking this step could complicate and/or slow down your loan approval process.
  • Seek Professional Advice: Especially for significant loans or complex assets, you should consult with legal or financial professionals to understand the implications of the UCC-1 filing on your business operations and other financing options.


The UCC-1 Financing Statement plays a crucial role in commercial lending, offering protection for lenders and clarity for other creditors. As a borrower, awareness of this process can help to navigate the lending landscape more confidently and make informed decisions about leveraging assets as collateral.


Click Here to Go back to Banking & Finance


Want to talk to an attorney who understands your Banking & Finance needs? Let's connect.