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UCC lien search: what it is and what lenders look for

Last updated · Kaaj editorial team

A UCC lien search looks up Uniform Commercial Code financing statements (UCC-1 filings) recorded against a business to see which creditors already claim an interest in its assets. Lenders run one before lending to find existing secured debt, blanket liens that would put a new loan behind another creditor, and undisclosed financing such as merchant cash advances.

What a UCC lien is

When a lender takes collateral, it files a UCC-1 financing statement to put other creditors on notice and establish the priority of its claim. The filing names the debtor, the secured party, and the collateral, which can be a specific asset such as a piece of equipment or all of the business's assets (a blanket lien).

Later changes are filed on a UCC-3: amendments, assignments, continuations, and terminations when the debt is paid.

How to run a UCC lien search

  • Search the filing office of the debtor's state of organization. For registered entities such as LLCs and corporations, that state is generally where financing statements are filed.
  • Search the exact legal name as it appears in the state registration, plus common variations, since search logic is name-based.
  • Pull the filed documents, not just the index, to see the collateral description.
  • Check for UCC-3 terminations and continuations to see which filings are still effective.

What lenders look for in the results

  • Blanket liens on all assets that would put the new lender in a junior position
  • Existing liens on the specific equipment or receivables offered as collateral
  • Filings by merchant cash advance funders, which often reveal positions missing from the application
  • Many recent filings, which can signal stacking or cash stress
  • Name mismatches between filings and the application

How long a UCC filing lasts

Under UCC Article 9, a financing statement is generally effective for five years from filing and lapses unless a continuation is filed in the six months before it expires. A paid-off lender should file a UCC-3 termination; stale filings that were never terminated are common and worth confirming with the creditor.

Frequently asked questions

What is a UCC lien?

A UCC lien is a creditor's claim on a business's assets, made public by filing a UCC-1 financing statement with the state. It establishes the creditor's priority over the collateral.

What is a blanket UCC lien?

A blanket lien covers all of a business's assets rather than a specific item. A new lender behind a blanket lien would be junior on any collateral it takes unless the existing lender agrees otherwise.

How long does a UCC-1 filing last?

Generally five years from filing, unless continued with a UCC-3 in the six months before it lapses.

Do merchant cash advance companies file UCC liens?

Many do. MCA filings in a UCC search are a common way lenders discover advances the applicant did not disclose.

How do you remove a UCC lien?

After the debt is paid, the secured party files a UCC-3 termination statement. If it does not, the debtor can request one and, in many states, file a termination when the secured party fails to respond.

Related

Sources: UCC § 9-515: Duration and effectiveness of financing statement (Cornell Law School LII)