What is a UCC and how does it apply to me wanting to change factoring companies?
It is standard industry practice for a factoring company to file a blanket Uniform Commercial Code (UCC) to secure the factors first position security interest on the invoices funded. The UCC is a way for factoring companies, banks and commercial lenders to keep straight who is lending on what assets. Because receivables change on daily basis as new invoices collect and old invoices are paid, factors must file what is called a blanket UCC filing collateralizing all of your receivables even though you may only be factoring a portion of your sales. Its simply impossible for factors to file a new UCC for each invoice funded. The UCC is simply a flag for other lenders who chose to run a search indicating a Security Agreement exists between your company and the factoring company. The details of your particular factoring arrangement, such as rates and which accounts are factored, are outlined in the Security Agreement itself which is not public not. A UCC is similar to a first mortgage on yo
