By Suzanna Winters September 10, 2025
UCC filings are public documents that create a legal claim of a lender on a borrower’s property. Though these filings are vital in accessing business loans, they do not usually impact personal credit scores unless they involve a personal guarantee. It is essential to comprehend how UCC filings operate, particularly when planning for borrowing or obtaining credit in future.
What Is a UCC Filing?
A UCC filing, or a UCC-1 filing, is an official form utilized to publicly announce a lender’s interest in a borrower’s property. It’s part of the Uniform Commercial Code (UCC), a body of law that regulates business across the United States in a standardized way. When issuing a loan that’s secured by the borrower’s property, a lender files this statement with the Secretary of State’s office in their state.
The filing serves as a notice to other creditors that the lender has a claim on specific assets, that if the borrower fails to pay back the loan, the lender can repossess those assets to settle the debt.
What Assets Are Subject to a UCC Lien?
A UCC lien can be placed on various types of business property. The two main types are specific liens and blanket liens. A specific lien is placed on a single asset. For instance, if you take out a loan to purchase business equipment, such as restaurant or construction equipment, the lender can assert the right to repossess the items in case you fail to repay the loan.
A blanket lien, though, extends to all of your business assets, such as real property, inventory, receivables (debt owed to you by your customers), and even securities investments. This allows the lender to seize nearly anything your business owns if you don’t make payments for the loan.
Most states do shield some personal assets from seizure, including your home furnishings, a percentage of the equity in your home, and one vehicle. For entrepreneurs, additionally, a few states also allow you to retain minimal business equipment and tools, usually up to $2,000, and savings in tax-deferred retirement accounts.
How Much Does It Cost to File UCC Financing Statements?
The filing fee of a UCC financing statement can differ based on the state in which the business is incorporated. While some states charge minimal filing fees, others can be slightly more expensive. Here’s a summary of average filing fees across various states:
- New York: $20 for electronic and $40 for paper filing.
- Texas: $15 per two-page application, $30 for more extended applications.
- California: $5 for online filing, $10 for up to two pages, $20 for longer applications.
- Montana: $7 for filing
- Maine: $15 for up to two pages, $30 for longer applications.
- Florida: $35 – $45 for filing.
- Arizona: $9 for filing.
The fees depend on the state and sometimes the method of filing (electronic vs. paper). Be sure to check the exact filing fees for your state before submitting your UCC application!
Is a UCC Agreement a Good Thing?
A UCC agreement could be a good idea if it provides you access to finances that you couldn’t otherwise obtain, particularly if the finance is offered at a reasonable interest rate. If you feel your business will have sufficient revenue and cash flow to pay back the loan, you don’t have to be concerned about the risk of losing any assets.
But it’s necessary to consider future threats. What if there is a seasonal slump, a natural catastrophe, or a situation that impacts your capacity to repay? Such elements can increase the difficulty of keeping up with your loan installments.
If the loan is coupled with a blanket lien, the risk is amplified. A blanket lien has a broad scope, so the lender may seize much more than the equipment you borrowed against, even threatening your whole business.
Also, keep in mind that the lien may hold you back from selling any of your property, such as equipment or inventory, until the loan has been repaid. It’s important to consider these risks before signing an agreement for a UCC lien.
Example of a UCC Lien Filing
Suppose you have a coffee shop in New York and decide you want a new, speedier espresso machine to handle your busy customers. You borrow money to buy the machine, and the creditor files a UCC lien to guarantee the loan.
This implies that when you fail to repay the loan for the coffee machine, the lender has the right to repossess the machine or take other assets owned by your business. While you’re paying off the loan, the espresso machine is used as collateral. This means it’s tied to the UCC lien and will have a UCC filing against it until you’ve paid off the debt in full.
The lender’s claim is publicly recorded, so anyone checking the records will know that the machine is under a lien. Now, suppose that you wish to obtain a second loan while you are paying off the espresso machine. When you attempt to use the machine as collateral for the second loan, the new lender will perform a UCC search in New York.
They will be able to pick up on the UCC filing that was placed by your first lender, so the espresso machine is already taken as collateral until your second loan is paid off. This will prevent you from using the same asset to secure another loan.
In this case, the UCC-1 Financing Statement is the public document that secures the lender’s interest. It provides public notice that the lender retains the right to take back and sell particular property if the loan is not repaid.
This form of filing is usually demanded by lenders to ensure that they have some protection in the event of non-payment or bankruptcy, and it determines the conditions for what occurs in the event of payment failure by the borrower.
How to file a UCC-1 Financing Statement
It is an easy procedure to file a UCC-1 financing statement, but the process differs based on the state in which the borrower’s business is located. To begin with, go to the Secretary of State website of the concerned state and locate the UCC-1 form.
You can either print the form and mail it in or file it electronically, which is often faster and more affordable in most states. The form requires several key details, such as the borrower’s name, organization, and mailing address, as well as the secured party’s name, organization, and mailing address.
Additionally, you’ll need to provide a description of the collateral and specify the type of transaction. After completing the form correctly, submit it to the Secretary of State. Double-check the information carefully to avoid any errors that might slow down the filing or create problems later. If you need clarification or have any questions, don’t hesitate to ask the Secretary of State’s office to advise.
UCC Filings Impact on Business Credit
When a UCC-1 lien is filed against your business property, it will appear on your business credit report for a period of up to five years, or longer, based on the term of the loan. It can be viewed by other lenders, but it will not affect your business credit score until you miss payments on the loan.
UCC filings are a key component of obtaining small business loans. When you borrow a secured loan, the lender is assuming some risk by lending you funds without actually knowing whether or not you will repay it. To minimize that risk, the lender can pledge your business assets as collateral.
The filing of the UCC serves as a public notice that the lender has an interest in those assets and can take possession of them if you don’t repay the loan. Lenders who provide secured loans or merchant cash advances (MCAs) secure their investment by using UCC filings. In case of default, the lender can repossess the particular assets associated with the loan.
In case of any other liens on the same property, the UCC filing guarantees that the first lien holder is entitled to repossess the property. For other lenders, noticing a UCC filing would mean they are aware that there are already claims on some assets, and it might influence whether or not they would provide further funding.
UCC Filings and Personal Credit
When you borrow a business loan, you may be concerned about whether it will hurt your personal credit. Your personal credit and business credit are distinct but can converge in some circumstances.
Your individual credit report is attached to your Social Security number and reflects your credit activity, such as loans, credit cards, and lines of credit. Your business credit report is attached to your business’s tax ID number and monitors your business’s financial activity, such as business loans or credit.
Personal credit is reported to the three big bureaus:
- Equifax
- Experian
- TransUnion
Business credit, on the other hand, is reported to specialized agencies such as Equifax Small Business, Experian Business Credit, and Dun & Bradstreet (D&B). UCC filings on your business will, in most situations, not show up on your personal credit report.
But if you offer a personal guarantee on a merchant cash advance (MCA) or loan, it might impact your personal credit. A personal guarantee is when you personally guarantee the loan repayment if your business does not pay it back. So the actual UCC filing itself does not appear on your personal credit report, unless you personally guarantee it.
Let’s say you borrow a line of credit against your business, and the lender places a blanket UCC lien on your business assets. If they also demand a personal guarantee and your company is unable to repay it, you may be personally responsible for the debt.
If you’re unable to pay it back, that impact can appear on your personal credit report, just like a missed loan payment. So long as you don’t give a personal guarantee or miss any payments, your personal credit won’t be affected.
How Do I Remove a UCC Lien?
After you’ve repaid a business loan, your lender should eliminate the UCC lien by filing a UCC termination statement with your Secretary of State office. But this process can sometimes be slow, and past UCC filings could still appear on your business credit report. To prevent this, it’s a good idea to ask in writing for the lender to cancel the lien after you’ve made your last payment.
You must also monitor your business credit history to ensure there are no past UCC filings. You can do this by going to your state’s Secretary of State website and performing a UCC-1 filing search on your company. If you see a lien that is not supposed to be there, contact the lender and have them file the paperwork necessary to remove it.
Types of UCC Filings
Below, we’ll explain the different types of filings used in commercial lending:
UCC-1 Financing Statement: The Initial Filing
The UCC-1 financing statement is the initial action a lender can take to formally assert an interest in collateral held by a borrower. The filing is public and informs third parties that the lender has a lien on the collateral identified.
Before the loan funds are released by the lender, they record a UCC-1 to secure their position against the collateral. This secures the lender’s rights for five years from the date of filing. The debtor information (such as their precise legal business name) must be correct to prevent problems.
UCC-3: Modifications and Terminations
After a UCC-1 filing has been made, modifications might be required. That’s where the UCC-3 form comes in. A UCC-3 is filed to update the original filing, such as adding or removing collateral information or correcting the debtor’s name.
It’s also the form that lenders use to legally release their claim once a loan has been paid off. If the lender prefers not to have a claim against the collateral anymore, they’ll record a termination, which lifts their security interest off public records and allows the debtor to reclaim full ownership of the assets again.
Filings for Continuations and Assignments
A UCC-1 financing statement may lapse over time. To preserve their claim, a lender may file a continuation to renew the effectiveness of the initial filing. This needs to be done within six months prior to the lapse of the UCC-1 so that the priority of the lender will be preserved for another five years.
An assignment filing is used when a loan is transferred or sold from one lender to another. This filing gives legal effect to the new lender’s right to the collateral, thereby safeguarding their interest.
Searching for Current UCC Filings
The simplest method to search for UCC filings is on your state’s Secretary of State website. The majority of states offer an online search program where you can search by inputting information such as the debtor’s name, business name, or file number. These state public databases are a secure source of UCC records, making them a useful tool in your search.
If you don’t want to go through the hassle of the search yourself, you can assign it to a third-party service. Such services give you full reports by cross-checking various name spellings and verifying any pending claims on the assets.
Many companies also employ third-party services for routine UCC monitoring so that they are on top of their own filings and can catch on to any unauthorized modifications at an early stage.
How Long Does a UCC Filing Last?
A UCC-1 financing statement typically lasts for five years from the filing date. After that, it automatically expires unless the lender files a continuation statement to extend it. The predictable five-year timeline makes it easier to manage and keep track of your UCC filings.
To continue the filing, the continuation statement is to be filed six months prior to the expiration of the original filing. When a loan has been repaid and the lender no longer wishes to hold the collateral, they should file a UCC-3 termination statement to formally release their interest and clear the record.
By understanding how long these filings last and how to search them, businesses and lenders can ensure everything is properly documented and up-to-date.
Conclusion
UCC filings play an essential role in securing loans by giving lenders a legal claim to a borrower’s assets. While these filings generally do not impact personal credit scores, they can influence your ability to secure additional financing. Understanding how UCC filings work helps businesses and individuals navigate lending processes and make informed financial decisions.
FAQs
What is a UCC filing?
A UCC filing is a public document announcing a lender’s claim to a borrower’s property as collateral for a loan. It’s utilized to collateralize financing.
Do UCC filings impact personal credit?
UCC filings do not normally impact personal credit unless there is a personal guarantee on the loan, and the borrower fails to pay.
How long does a UCC-1 filing remain active?
A UCC-1 filing remains valid for five years from the date it is filed unless a continuation statement is filed prior to termination to renew it.
Is a UCC filing removable?
Yes, a UCC filing may be removed by filing a UCC-3 form, which legally discharges the lender’s lien on the collateral.
How do I search for UCC filings?
You can search UCC filings through your state’s Secretary of State website using the debtor’s name, business name, or file number.