UCC 9-620: The Ultimate Guide to Securing Your Business Assets

UCC 9-620 is a powerful tool that can help businesses protect their assets and reduce their risk of financial loss. Filing a UCC-1 financing statement creates a public record of your security interest in collateral, which gives you priority over other creditors if the borrower defaults on their loan.

Benefits of UCC 9-620

Protects your assets: A UCC-1 financing statement gives you a legal claim to the collateral described in the statement, even if the borrower files for bankruptcy.

Reduces your risk of financial loss: If the borrower defaults on their loan, you can seize and sell the collateral to satisfy your debt.

Improves your creditworthiness: Lenders are more likely to approve loans to businesses that have filed UCC-1 financing statements, as it shows that you are taking steps to protect your assets.

How to File a UCC-1 Financing Statement

Filing a UCC-1 financing statement is a relatively simple process. You can do it yourself or hire a professional to help you.

To file a UCC-1 financing statement, you will need the following information:

The name and address of the borrower

The name and address of the secured party (you)

A description of the collateral

The amount of the loan

The date the loan was made

You can file a UCC-1 financing statement with the secretary of state's office in the state where the borrower is located. The filing fee varies from state to state.

Common Mistakes to Avoid When Filing a UCC-1 Financing Statement

Not filing a UCC-1 financing statement: This is the most common mistake businesses make. If you do not file a UCC-1 financing statement, you will not have a legal claim to the collateral if the borrower defaults on their loan.

Filing a UCC-1 financing statement in the wrong state: You must file a UCC-1 financing statement in the state where the borrower is located. Otherwise, your financing statement will not be valid.

Not providing enough information on the UCC-1 financing statement: The UCC-1 financing statement must contain certain information, including the name and address of the borrower, the name and address of the secured party, a description of the collateral, the amount of the loan, and the date the loan was made. If you do not provide all of this information, your financing statement may not be valid.

Filing a UCC-1 financing statement that is not properly executed: The UCC-1 financing statement must be signed by the borrower and the secured party. If the financing statement is not properly executed, it will not be valid.

Success Stories

Company A: Company A filed a UCC-1 financing statement to secure its interest in a loan it made to a customer. The customer later defaulted on its loan, and Company A was able to seize and sell the collateral to satisfy its debt.

Company B: Company B filed a UCC-1 financing statement to secure its interest in a lease it made to a customer. The customer later filed for bankruptcy, but Company B was able to retain its interest in the leased equipment because it had filed a UCC-1 financing statement.

Company C: Company C filed a UCC-1 financing statement to secure its interest in a loan it made to a business. The business later defaulted on its loan, and Company C was able to negotiate a settlement with the business's other creditors to recover its debt.

UCC 9-620: The Ultimate Guide to Securing Your Business Assets