What a UCC Filing Is
A UCC financing statement is a filing made under the Uniform Commercial Code that puts third parties on notice that a creditor claims a security interest in specified collateral. It is a notice filing: it does not by itself transfer ownership or freeze accounts. The security interest is created by the underlying security agreement; the UCC filing perfects (publicly establishes) that interest.
In MCA transactions, the collateral often includes receivables, proceeds, and other business assets. The UCC filing helps establish the funder's priority relative to other creditors who might claim the same assets.
What a UCC Filing Does and Does Not Do
A UCC filing establishes notice of a security interest and can affect priority among creditors. It does not, by itself, freeze a bank account, seize assets, or prevent a business from operating. Enforcement of a security interest typically requires additional steps under Article 9 of the UCC and applicable law, such as default, notice, and a disposition process.
A common misconception is that a UCC filing automatically locks up a business's bank account. It does not. A bank levy requires a judgment (or other legal process); a UCC filing is a different instrument with a different purpose.
When Counsel May Be Appropriate
Business owners who discover a UCC filing against their business — especially when seeking new financing, selling assets, or facing default — may benefit from review by qualified legal counsel. Counsel can assess the scope of the collateral, the validity and priority of the filing, and the consequences for the business.
This website is educational and is not a law firm. Submitting your situation does not create an attorney-client relationship. Where appropriate, users may be connected with independent legal counsel through a separate engagement.
Key Distinctions
A public notice that a creditor claims a security interest in collateral.
A creditor's interest in collateral created by a security agreement; perfected by the UCC filing.
Enforcement targeting bank funds — distinct from a UCC filing and generally requiring a judgment.
Key Takeaways
- 01A UCC filing gives notice of a security interest; it does not freeze accounts or seize assets.
- 02The security interest comes from the security agreement; the filing perfects it.
- 03A UCC filing affects creditor priority, not day-to-day operation of the business.
- 04A UCC filing affecting your business may warrant review by qualified counsel.
Not a law firm. MCA Debt Attorney and MYMCAOPTIONS LLC are not law firms and do not provide legal advice. Submitting your situation through this website does not create an attorney-client relationship. Where appropriate, users may be connected with independent legal counsel through a separate engagement.