What is a UCC filing?
A uniform commercial code filing is a document (called a financing statement or UCC1) stating that someone (a secured party) has a claim (security interest) in certain property (collateral) belonging to someone else (debtor). To illustrate; a business owner borrows money from a bank and uses the assets of the business as collateral for the loan. The bank as the secured party files a financing statement with the Secretary of State’s office. By filing a financing statement, the bank establishes its priority in the event the business owner borrows money from others, files for bankruptcy or becomes insolvent. This filing gives notice via public record to other lenders that the secured party has a security interest in the business assets.
