UCC-3 Financing Statement | Practical Law
UCC-3 Financing Statement
Practical law glossary item 1-382-3886 (approx. 2 pages).
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What is a UCC financing statement and how to make sure it is bulletproof
21 July 2023
Table Of Contents
Filing a UCC financing statement is an important step in protecting one's rights to collateral and is often a critical element of business transactions. Knowing the ins-and-outs of filing a UCC financing statement is essential for ensuring that it is bulletproof, and AnyLawyer's suite of legal-tech tools make this process much easier and faster.
In this blog post, we will explore what a UCC financing statement is, list the type of filings associated with it, and describe how to file and search for a UCC financing statement.
The Uniform Commercial Code
The Uniform Commercial Code (UCC) is a set of laws that govern commercial transactions and contracts. Originally drafted in 1952, the UCC was adopted by all 50 states as a uniform set of laws governing business-related matters. This means that commercial contracts are enforced in the same way across the US. The UCC financing statement is one element of the UCC.
What is a UCC financing statement?
A UCC financing statement - also known as a UCC-1 financing statement or a UCC-1 filing - is a legal document that states that the filer has an interest in a particular asset or piece of collateral. It notifies anyone who searches public records that this asset is already encumbered, and provides legal protection for the holder of the security interest. Should the debtor default on the loan, the creditor might be able to seize the collateral.
The lien can be against a specific collateral, or it can take the form of a blanket lien, which applies to all of the debtor's business assets. Depending on the type of lien, different types of UCC-1 filings may be required.
What are the legal consequences of a UCC-1 filing?
By filing a UCC financing statement, the creditor notifies other potential creditors that they have an interest in the collateral. The filing creates an order in which assets can be seized, in the case of a defaulted loan or declared bankruptcy. Additionally, if the same asset is used as collateral in another loan, the first lender will be prioritized: the second lender will not be able to recover the asset unless the original lender is satisfied.
Types of UCC-1 filings
There are two types of UCC-1 filings: UCC liens against a specific collateral and UCC blanket liens. A UCC lien against a specific collateral is registered with the state and identifies the actual asset that is being used as collateral. This type of filing protects the creditor in cases where multiple assets are being used as collateral, such as when a vehicle is bought with an auto loan but secured by other personal property owned by the borrower.
Specific collateral can come in the form of movable objects, such as cars, boats, and jewelry, but it can also include investment securities, receivables, and intellectual property.
A UCC blanket lien provides protection against all the debtor's business assets, regardless of type or location. It is often used when a large number of assets are involved, such as in the case of corporate loans taken by small business owners that put their entire business up as collateral. If the borrower defaults, the creditor has the right of recovery on all assets, up to the value of the debt.
This type of filing protects lenders from the event that a specific asset is damaged, destroyed, or otherwise loses value. However, a blanket lien offers little protection for borrowers, as the creditor is granted access to all of their assets and could potentially put them out of business.
How to file a UCC financing statement
Filing a UCC financing statement must include the following information:
- Personal information of the borrower: the filing must establish whether the debtor is an organization or an individual. In the case of registered organizations, the name of the debtor must match the organization's name in the public record. In the case of an individual, their name in the filing should match their name on an unexpired driver's license in their state of residence. Some states, e.g. Delaware, offer a "safe harbor" option, which makes multiple names for an individual acceptable, such as a name under which they own property.
- Personal information of the lender or the lender's representative: multiple names can be listed if there is more than one lender.
- Description of the collateral: the description must reasonably identify the collateral. In the case of a blanket lien, an indication that the UCC financing statement covers all of the debtor's assets.
Where to file
Once all the necessary information has been prepared, it is easy enough to file the UCC financing statement with the appropriate secretary of state's office. This does not necessarily occur where the collateral is located, like in the past, but in the state in which either the borrowing organization is registered, or in which the individual borrower resides.
When to file
It is important to keep in mind that the order of filing has an impact on the outcome. A borrower can secure loans from more than one lender, and each lender has the right to file a UCC financing statement. The lender that was the first to file an accurate UCC-1 financing statement (to "perfect" their interest) is also the first to collect on the lien. Once they are satisfied, the lender that was second to file takes their turn to collect, and so on.
How to search for a UCC financing statement
Once a UCC financing statement has been filed, it becomes public record. It can be found using the secretary of state's website, for the state in which the UCC-1 filing was filed. Commercial UCC search engines can be used to simplify the process.
The name of the debtor used for the search must be exact, as results can be affected by small differences:
- & vs "and",
- a singular form vs a plural form of a name,
- typos or extra spaces,
- numerals (1 instead of "one").
UCC financing statement FAQ
Q: can the debtor's personal property be the collateral indicated in a ucc-1 filing.
A: Yes, in most cases. However, the debtor must be identified correctly and the description of the collateral must be detailed enough for a reasonable person to identify it.
Q: Does a UCC-1 filing create an ownership interest in the collateral?
A: No, it does not create ownership or any other type of legal rights over an asset. It only creates a lien on the asset, giving the lender a security interest in it.
Q: How long does a UCC-1 filing remain active?
A: A UCC-1 financing statement is valid for five years from the date of filing. It can be renewed before expiration for another five-year period.
Q: Does a UCC-1 filing need to be registered in all states where the debtor has assets?
A: No, only the state in which either the borrowing organization is registered, or in which the individual borrower resides needs to be considered.
Q: Is a UCC filing required for all types of loans?
A: No. Some loan agreements do not involve collateral and thus do not require a UCC-1 filing.
Using AI tools to ensure a correct filing
Filing a UCC financing statement correctly is essential to protect creditors' interests and ensure that the filing stands up in court. However, it is easy to make mistakes when filling out such paperwork. Luckily, AI-based tools can help lenders avoid errors and omissions when filing UCC statements. These tools use natural language processing (NLP) to extract relevant information from documents and can fill in the form automatically, eliminating the risk of human error to ensure a bulletproof filing.
Enforcing security interest with the help of a UCC-1 filing
Filing a Uniform Commercial Code financing statement is an important step in protecting one's rights to collateral and is often a critical element of business transactions. By understanding what a UCC financing statement is and how to file one, lenders can ensure that they will be able to collect their secured interest in the case of a loan default or the debtor's bankruptcy. AnyLawyer's suite of legal-tech tools makes the process of filing a UCC financing statement much easier, faster, and more secure. With the help of AnyLawyer, lenders can be certain that their UCC financing statements will be well-crafted and properly filed.
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U.C.C. - ARTICLE 9 - SECURED TRANSACTIONS (2010)
- Part 1. General Provisions
[Subpart 1. Short Title, Definitions, and General Concepts]
- § 9-101 . SHORT TITLE.
- § 9-102 . DEFINITIONS AND INDEX OF DEFINITIONS.
- § 9-103 . PURCHASE-MONEY SECURITY INTEREST; APPLICATION OF PAYMENTS; BURDEN OF ESTABLISHING.
- § 9-104 . CONTROL OF DEPOSIT ACCOUNT.
- § 9-105 . CONTROL OF ELECTRONIC CHATTEL PAPER.
- § 9-106 . CONTROL OF INVESTMENT PROPERTY.
- § 9-107 . CONTROL OF LETTER-OF-CREDIT RIGHT.
- § 9-108 . SUFFICIENCY OF DESCRIPTION.
[Subpart 2. Applicability of Article]
- § 9-109 . SCOPE.
- § 9-110 . SECURITY INTERESTS ARISING UNDER ARTICLE 2 OR 2A.
- Part 2. Effectiveness of Security Agreement; Attachment of Security Interest; Rights of Parties to Security Agreement
[Subpart 1. Effectiveness and Attachment]
- § 9-201 . GENERAL EFFECTIVENESS OF SECURITY AGREEMENT.
- § 9-202 . TITLE TO COLLATERAL IMMATERIAL.
- § 9-203 . ATTACHMENT AND ENFORCEABILITY OF SECURITY INTEREST; PROCEEDS; SUPPORTING OBLIGATIONS; FORMAL REQUISITES.
- § 9-204 . AFTER-ACQUIRED PROPERTY; FUTURE ADVANCES.
- § 9-205 . USE OR DISPOSITION OF COLLATERAL PERMISSIBLE.
- § 9-206 . SECURITY INTEREST ARISING IN PURCHASE OR DELIVERY OF FINANCIAL ASSET.
[Subpart 2. Rights and Duties]
- § 9-207 . RIGHTS AND DUTIES OF SECURED PARTY HAVING POSSESSION OR CONTROL OF COLLATERAL.
- § 9-208 . ADDITIONAL DUTIES OF SECURED PARTY HAVING CONTROL OF COLLATERAL.
- § 9-209 . DUTIES OF SECURED PARTY IF ACCOUNT DEBTOR HAS BEEN NOTIFIED OF ASSIGNMENT.
- § 9-210 . REQUEST FOR ACCOUNTING; REQUEST REGARDING LIST OF COLLATERAL OR STATEMENT OF ACCOUNT.
- Part 3. Perfection and Priority
[Subpart 1. Law Governing Perfection and Priority]
- § 9-301 . LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS.
- § 9-302 . LAW GOVERNING PERFECTION AND PRIORITY OF AGRICULTURAL LIENS.
- § 9-303 . LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN GOODS COVERED BY A CERTIFICATE OF TITLE.
- § 9-304 . LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN DEPOSIT ACCOUNTS.
- § 9-305 . LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN INVESTMENT PROPERTY.
- § 9-306 . LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN LETTER-OF-CREDIT RIGHTS.
- § 9-307 . LOCATION OF DEBTOR.
- § 9-308 . WHEN SECURITY INTEREST OR AGRICULTURAL LIEN IS PERFECTED; CONTINUITY OF PERFECTION.
- § 9-309 . SECURITY INTEREST PERFECTED UPON ATTACHMENT.
- § 9-310 . WHEN FILING REQUIRED TO PERFECT SECURITY INTEREST OR AGRICULTURAL LIEN; SECURITY INTERESTS AND AGRICULTURAL LIENS TO WHICH FILING PROVISIONS DO NOT APPLY.
- § 9-311 . PERFECTION OF SECURITY INTERESTS IN PROPERTY SUBJECT TO CERTAIN STATUTES, REGULATIONS, AND TREATIES.
- § 9-312 . PERFECTION OF SECURITY INTERESTS IN CHATTEL PAPER, DEPOSIT ACCOUNTS, DOCUMENTS, GOODS COVERED BY DOCUMENTS, INSTRUMENTS, INVESTMENT PROPERTY, LETTER-OF-CREDIT RIGHTS, AND MONEY; PERFECTION BY PERMISSIVE FILING; TEMPORARY PERFECTION WITHOUT FILING OR TRANSFER OF POSSESSION.
- § 9-313 . WHEN POSSESSION BY OR DELIVERY TO SECURED PARTY PERFECTS SECURITY INTEREST WITHOUT FILING.
- § 9-314 . PERFECTION BY CONTROL.
- § 9-315 . SECURED PARTY'S RIGHTS ON DISPOSITION OF COLLATERAL AND IN PROCEEDS.
- § 9-316 . CONTINUED PERFECTION OF SECURITY INTEREST FOLLOWING CHANGE IN GOVERNING LAW.
[Subpart 3. Priority]
- § 9-317 . INTERESTS THAT TAKE PRIORITY OVER OR TAKE FREE OF UNPERFECTED SECURITY INTEREST OR AGRICULTURAL LIEN.
- § 9-318 . NO INTEREST RETAINED IN RIGHT TO PAYMENT THAT IS SOLD; RIGHTS AND TITLE OF SELLER OF ACCOUNT OR CHATTEL PAPER WITH RESPECT TO CREDITORS AND PURCHASERS.
- § 9-319 . RIGHTS AND TITLE OF CONSIGNEE WITH RESPECT TO CREDITORS AND PURCHASERS.
- § 9-320 . BUYER OF GOODS.
- § 9-321 . LICENSEE OF GENERAL INTANGIBLE AND LESSEE OF GOODS IN ORDINARY COURSE OF BUSINESS.
- § 9-322 . PRIORITIES AMONG CONFLICTING SECURITY INTERESTS IN AND AGRICULTURAL LIENS ON SAME COLLATERAL.
- § 9-323 . FUTURE ADVANCES.
- § 9-324 . PRIORITY OF PURCHASE-MONEY SECURITY INTERESTS.
- § 9-325 . PRIORITY OF SECURITY INTERESTS IN TRANSFERRED COLLATERAL.
- § 9-326 . PRIORITY OF SECURITY INTERESTS CREATED BY NEW DEBTOR.
- § 9-327 . PRIORITY OF SECURITY INTERESTS IN DEPOSIT ACCOUNT.
- § 9-328 . PRIORITY OF SECURITY INTERESTS IN INVESTMENT PROPERTY.
- § 9-329 . PRIORITY OF SECURITY INTERESTS IN LETTER-OF-CREDIT RIGHT.
- § 9-330 . PRIORITY OF PURCHASER OF CHATTEL PAPER OR INSTRUMENT.
- § 9-331 . PRIORITY OF RIGHTS OF PURCHASERS OF INSTRUMENTS, DOCUMENTS, AND SECURITIES UNDER OTHER ARTICLES; PRIORITY OF INTERESTS IN FINANCIAL ASSETS AND SECURITY ENTITLEMENTS UNDER ARTICLE 8.
- § 9-332 . TRANSFER OF MONEY; TRANSFER OF FUNDS FROM DEPOSIT ACCOUNT.
- § 9-333 . PRIORITY OF CERTAIN LIENS ARISING BY OPERATION OF LAW.
- § 9-334 . PRIORITY OF SECURITY INTERESTS IN FIXTURES AND CROPS.
- § 9-335 . ACCESSIONS.
- § 9-336 . COMMINGLED GOODS.
- § 9-337 . PRIORITY OF SECURITY INTERESTS IN GOODS COVERED BY CERTIFICATE OF TITLE.
- § 9-338 . PRIORITY OF SECURITY INTEREST OR AGRICULTURAL LIEN PERFECTED BY FILED FINANCING STATEMENT PROVIDING CERTAIN INCORRECT INFORMATION.
- § 9-339 . PRIORITY SUBJECT TO SUBORDINATION.
[Subpart 4. Rights of Bank]
- § 9-340 . EFFECTIVENESS OF RIGHT OF RECOUPMENT OR SET-OFF AGAINST DEPOSIT ACCOUNT.
- § 9-341 . BANK'S RIGHTS AND DUTIES WITH RESPECT TO DEPOSIT ACCOUNT.
- § 9-342 . BANK'S RIGHT TO REFUSE TO ENTER INTO OR DISCLOSE EXISTENCE OF CONTROL AGREEMENT.
- Part 4. Rights of Third Parties
- § 9-401 . ALIENABILITY OF DEBTOR'S RIGHTS.
- § 9-402 . SECURED PARTY NOT OBLIGATED ON CONTRACT OF DEBTOR OR IN TORT.
- § 9-403 . AGREEMENT NOT TO ASSERT DEFENSES AGAINST ASSIGNEE.
- § 9-404 . RIGHTS ACQUIRED BY ASSIGNEE; CLAIMS AND DEFENSES AGAINST ASSIGNEE.
- § 9-405 . MODIFICATION OF ASSIGNED CONTRACT.
- § 9-406 . DISCHARGE OF ACCOUNT DEBTOR; NOTIFICATION OF ASSIGNMENT; IDENTIFICATION AND PROOF OF ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, CHATTEL PAPER, PAYMENT INTANGIBLES, AND PROMISSORY NOTES INEFFECTIVE.
- § 9-407 . RESTRICTIONS ON CREATION OR ENFORCEMENT OF SECURITY INTEREST IN LEASEHOLD INTEREST OR IN LESSOR'S RESIDUAL INTEREST.
- § 9-408 . RESTRICTIONS ON ASSIGNMENT OF PROMISSORY NOTES, HEALTH-CARE-INSURANCE RECEIVABLES, AND CERTAIN GENERAL INTANGIBLES INEFFECTIVE.
- § 9-409 . RESTRICTIONS ON ASSIGNMENT OF LETTER-OF-CREDIT RIGHTS INEFFECTIVE.
- Part 5. Filing
[Subpart 1. Filing Office; Contents and Effectiveness of Financing Statement]
- § 9-501 . FILING OFFICE.
- § 9-502 . CONTENTS OF FINANCING STATEMENT; RECORD OF MORTGAGE AS FINANCING STATEMENT; TIME OF FILING FINANCING STATEMENT.
- § 9-503 . NAME OF DEBTOR AND SECURED PARTY.
- § 9-504 . INDICATION OF COLLATERAL.
- § 9-505 . FILING AND COMPLIANCE WITH OTHER STATUTES AND TREATIES FOR CONSIGNMENTS, LEASES, OTHER BAILMENTS, AND OTHER TRANSACTIONS.
- § 9-506 . EFFECT OF ERRORS OR OMISSIONS.
- § 9-507 . EFFECT OF CERTAIN EVENTS ON EFFECTIVENESS OF FINANCING STATEMENT.
- § 9-508 . EFFECTIVENESS OF FINANCING STATEMENT IF NEW DEBTOR BECOMES BOUND BY SECURITY AGREEMENT.
- § 9-509 . PERSONS ENTITLED TO FILE A RECORD.
- § 9-510 . EFFECTIVENESS OF FILED RECORD.
- § 9-511 . SECURED PARTY OF RECORD.
- § 9-512 . AMENDMENT OF FINANCING STATEMENT.
- § 9-513 . TERMINATION STATEMENT.
- § 9-514 . ASSIGNMENT OF POWERS OF SECURED PARTY OF RECORD.
- § 9-515 . DURATION AND EFFECTIVENESS OF FINANCING STATEMENT; EFFECT OF LAPSED FINANCING STATEMENT.
- § 9-516 . WHAT CONSTITUTES FILING; EFFECTIVENESS OF FILING.
- § 9-517 . EFFECT OF INDEXING ERRORS.
- § 9-518 . CLAIM CONCERNING INACCURATE OR WRONGFULLY FILED RECORD.
[Subpart 2. Duties and Operation of Filing Office]
- § 9-519 . NUMBERING, MAINTAINING, AND INDEXING RECORDS; COMMUNICATING INFORMATION PROVIDED IN RECORDS.
- § 9-520 . ACCEPTANCE AND REFUSAL TO ACCEPT RECORD.
- § 9-521 . UNIFORM FORM OF WRITTEN FINANCING STATEMENT AND AMENDMENT.
- § 9-522 . MAINTENANCE AND DESTRUCTION OF RECORDS.
- § 9-523 . INFORMATION FROM FILING OFFICE; SALE OR LICENSE OF RECORDS.
- § 9-524 . DELAY BY FILING OFFICE.
- § 9-525 . FEES.
- § 9-526 . FILING-OFFICE RULES.
- § 9-527 . DUTY TO REPORT.
- Part 6. Default
[Subpart 1. Default and Enforcement of Security Interest]
- § 9-601 . RIGHTS AFTER DEFAULT; JUDICIAL ENFORCEMENT; CONSIGNOR OR BUYER OF ACCOUNTS, CHATTEL PAPER, PAYMENT INTANGIBLES, OR PROMISSORY NOTES.
- § 9-602 . WAIVER AND VARIANCE OF RIGHTS AND DUTIES.
- § 9-603 . AGREEMENT ON STANDARDS CONCERNING RIGHTS AND DUTIES.
- § 9-604 . PROCEDURE IF SECURITY AGREEMENT COVERS REAL PROPERTY OR FIXTURES.
- § 9-605 . UNKNOWN DEBTOR OR SECONDARY OBLIGOR.
- § 9-606 . TIME OF DEFAULT FOR AGRICULTURAL LIEN.
- § 9-607 . COLLECTION AND ENFORCEMENT BY SECURED PARTY.
- § 9-608 . APPLICATION OF PROCEEDS OF COLLECTION OR ENFORCEMENT; LIABILITY FOR DEFICIENCY AND RIGHT TO SURPLUS.
- § 9-609 . SECURED PARTY'S RIGHT TO TAKE POSSESSION AFTER DEFAULT.
- § 9-610 . DISPOSITION OF COLLATERAL AFTER DEFAULT.
- § 9-611 . NOTIFICATION BEFORE DISPOSITION OF COLLATERAL.
- § 9-612 . TIMELINESS OF NOTIFICATION BEFORE DISPOSITION OF COLLATERAL.
- § 9-613 . CONTENTS AND FORM OF NOTIFICATION BEFORE DISPOSITION OF COLLATERAL: GENERAL.
- § 9-614 . CONTENTS AND FORM OF NOTIFICATION BEFORE DISPOSITION OF COLLATERAL: CONSUMER-GOODS TRANSACTION.
- § 9-615 . APPLICATION OF PROCEEDS OF DISPOSITION; LIABILITY FOR DEFICIENCY AND RIGHT TO SURPLUS.
- § 9-616 . EXPLANATION OF CALCULATION OF SURPLUS OR DEFICIENCY.
- § 9-617 . RIGHTS OF TRANSFEREE OF COLLATERAL.
- § 9-618 . RIGHTS AND DUTIES OF CERTAIN SECONDARY OBLIGORS.
- § 9-619 . TRANSFER OF RECORD OR LEGAL TITLE.
- § 9-620 . ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL SATISFACTION OF OBLIGATION; COMPULSORY DISPOSITION OF COLLATERAL.
- § 9-621 . NOTIFICATION OF PROPOSAL TO ACCEPT COLLATERAL.
- § 9-622 . EFFECT OF ACCEPTANCE OF COLLATERAL.
- § 9-623 . RIGHT TO REDEEM COLLATERAL.
- § 9-624 . WAIVER.
[Subpart 2. Noncompliance with Article]
- § 9-625 . REMEDIES FOR SECURED PARTY'S FAILURE TO COMPLY WITH ARTICLE.
- § 9-626 . ACTION IN WHICH DEFICIENCY OR SURPLUS IS IN ISSUE.
- § 9-627 . DETERMINATION OF WHETHER CONDUCT WAS COMMERCIALLY REASONABLE.
- § 9-628 . NONLIABILITY AND LIMITATION ON LIABILITY OF SECURED PARTY; LIABILITY OF SECONDARY OBLIGOR.
- Part 7. Transition
- § 9-701 . EFFECTIVE DATE.
- § 9-702 . SAVINGS CLAUSE.
- § 9-703 . SECURITY INTEREST PERFECTED BEFORE EFFECTIVE DATE.
- § 9-704 . SECURITY INTEREST UNPERFECTED BEFORE EFFECTIVE DATE.
- § 9-705 . EFFECTIVENESS OF ACTION TAKEN BEFORE EFFECTIVE DATE.
- § 9-706 . WHEN INITIAL FINANCING STATEMENT SUFFICES TO CONTINUE EFFECTIVENESS OF FINANCING STATEMENT.
- § 9-707 . AMENDMENT OF PRE-EFFECTIVE-DATE FINANCING STATEMENT.
- § 9-708 . PERSONS ENTITLED TO FILE INITIAL FINANCING STATEMENT OR CONTINUATION STATEMENT.
- § 9-709 . PRIORITY.
- Part 8. TRANSITION PROVISIONS FOR 2010 AMENDMENTS
What Is a UCC Financing Statement?
Written by: Alison Wilkinson Legally Reviewed by: David Curle and Jennifer Tsai
March 23, 2021
6 minute read
The Uniform Commercial Code , or UCC, is a set of model rules that govern commercial transactions in the United States. Every state has adopted these model rules in substantially similar form, meaning that the terms of a commercial contract entered into in Connecticut is enforced in the same way as the terms of a commercial contract in Texas or any other state. The uniformity of application gives certainty to business relationships.
A UCC financing statement — also called a UCC-1 financing statement or a UCC-1 filing — is a legal form that allows a lender to announce a lien on an asset to secure a loan . By filing the UCC financing statement, the lender is giving notice that it has an interest in the property listed in the filing. This means that if the debtor defaults on the loan, the creditor can potentially receive the personal property of the debtor that was put up as collateral.
The filing of a UCC financial statement creates a hierarchy of which assets can be seized, and in what order, should the debtor default or declare bankruptcy. For instance, if a borrower takes out another loan from a second lender using the same assets as collateral, the second lender will not be permitted to recover the assets until the first lender is fully satisfied. Accordingly, UCC-1 filings are generally filed as soon as the loan is made.
Types of UCC-1 Filings
There are two types of liens that can arise under a UCC financing statement: liens against specific collateral and blanket liens.
UCC Liens Against Specific Collateral
A UCC lien against specific collateral gives creditors an interest in a specific asset or in specific assets of the borrower. A lender will generally seek specific collateral when loaning money for a specific asset; for instance, if the loan is for money to purchase a backhoe, the backhoe itself could be the specific collateral for the loan. Thus, the types of specific collateral are usually moveable, including items such as vehicles, office equipment, or inventory. However, the collateral can also include items such as receivables, investment securities, letters of credit, and other items of value.
UCC Blanket Liens
Rather than giving an entitlement to specific assets, a blanket lien gives lenders an interest in all of the borrower’s business assets. If the borrower defaults, the lender can seize the business assets up to the value of the debt, then sell the assets to repay the debt. Assets can include tangible items like real estate and equipment, as well as intangible items like intellectual property.
This type of lien is favored by lenders. With specific collateral, if the item is destroyed or has lost value, it may not cover the loan. However, with a blanket lien, the lender can recover multiple items up to the value of the loan, giving the lender protection that a specific lien cannot.
On the flip side, a blanket lien provides minimum protection to borrowers, who could potentially lose all of their pledged assets in the event of default. In effect, this could mean that the borrower would be put out of business if the loan is defaulted.
How to File a UCC Financing Statement
When to file.
The order in which UCC financing statements are filed dictates the order in which lenders can collect. The first lender to file is able to repossess the collateral listed up to the value of the loan. Only after, or if, that lender is satisfied can the second lender to file collect. For that reason, lenders are apt to file quickly so they can be first in line. This also means a second lender may be hesitant to issue a loan to a borrower. Accordingly, it is of utmost importance that lenders correctly file the UCC financing statement in a timely fashion.
Information Included in a UCC-1 Filing
The following information must be included in the UCC-1 filing in order to perfect the lien:
Personal and contact information for the borrower
The filing should indicate whether the debtor is an individual or an organization , along with basic information about the debtor organization if applicable. If the borrower is a registered organization, the name of the borrower must exactly match the name of that organization in the public record — for instance, in the company’s articles of incorporation filed with the Secretary of State.
For an individual, generally the name listed should match the name on that individual’s driver’s license, but only if the individual has an unexpired driver’s license in the state of principal residence. This is appropriately known as the “ only if ” requirement: Only if the name exactly matches the one on the driver’s license can the lien be perfected.
In some states, however, such as Delaware, there is a “ safe harbor ” option. Under the safe harbor option, multiple names for an individual may be accepted, including a name that differs from the one listed on the driver’s license. For instance, if the debtor’s driver’s license identifies the individual as Jonathan Sullivan III, but the person owns property under the name Jon Sullivan, the name Jon Sullivan may also be accepted.
Personal and contact information for the lender or the lender’s representative
In the event of multiple lenders, multiple lender names can be listed.
Description of the collateral covered in the UCC lien
UCC financing statements must include a reasonably identifiable description of the collateral or an indication that the financing statements cover all assets or personal property. A supergeneric description — such as “all of the debtor’s personal property” — is generally not sufficient to reasonably identify the collateral.
Failure to include all of this information about the borrower, lender, and collateral could result in the state rejecting the filing. If the debtor enters into loans with multiple lenders at or near the same time, and a lender’s UCC-1 filing is rejected, this can have drastic effects on that lender’s ability to collect the loan in the event of default. The first lender to “perfect” its interest in the property, which means it has its UCC filing filed and accepted, will have priority in collecting on the loan, regardless of whether it was the first lender approached by the borrower.
Where to File the UCC-1 Filing
In the past, UCC filings could be made where the collateral was located. However, recent changes to the UCC provide that the location of the collateral no longer determines where to file.
Instead, filings are generally made with the secretary of state’s office in the state where either:
- The debtor organization is registered
- The individual debtor resides
Uncovering All Relevant Records
Once the UCC filing is perfected, it becomes public record. Accordingly, people can search the relevant databases to uncover whether there is a UCC lien against any given debtor. They can also search the secretary of state’s website in the state where the debtor resides or is incorporated for the exact name of the debtor. Commercial UCC search engines have similar search functions.
It is important to stress that during a search, the name of the debtor must be exact. In the case of an organization, the name can be confirmed by looking up the organization’s articles of incorporation on the secretary of state’s website. For an individual, it is best practice to try several variations of the name to ensure that the search delivers all relevant results, especially in a safe harbor jurisdiction.
A full understanding of the rules around filing UCC financing statements, and of the ramifications if the statements are filed incorrectly, is a key component to securing and collecting on commercial loans. Kira’s technology includes smart fields that are optimized for use on UCC financing statements, which allows users to uncover relevant information from their UCC financing searches.
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Risk Management Blog
Ucc & corporate due diligence resource guide for legal and financial professionals, 5 types of ucc3 change statements.
It’s an amendment filing to an original UCC1 financing statement that changes or adds information to the originally filed UCC1. It’s a filing tool secured parties use to manage their UCC portfolio to maintain their perfected security interests.
Importantly, • the timing of UCC3 recording execution • the accuracy of the data changes or additions • and choosing the correct amendment type can all be critical to maintaining a perfected security interest and the original UCC1 priority position.
Before discussing what a UCC3 is, its various types and how they are utilized, a quick review of UCC1s is in order. UCC1 financing statements are recorded filings which give notice to other creditors of a security interest in specific collateral used to secure debt. They are typically recorded to perfect the security interests of a secured party to prioritize their claim position in the event of a debtor default. UCC1s are subject to the effects of subsequently filed documents, whether those documents attach to the original filing, like a UCC3, or not, like a Federal tax lien.
Some of these subsequently filed documents can prime a perfected security interest, like Federal tax liens.
Others, like UCC3s if not executed according to statute, can cause a secured party to lose effectiveness of their lien, their UCC1, and all claims on any collateral should there be a default.
It’s that last piece that is vitally important about UCC3s: they can affect previously perfected security interests depending on when and where they are recorded, what they do, and how accurate the new data is.
What are the Different Types of UCC3s?
There are five different types of UCC3s.
- Continuations – extends the financing statement effectiveness for another five years;
- Party Amendments – adds or amends debtor or secured party information, such as changes to the legal name or the address
- Collateral Amendments – adds or removes collateral from the collateral description, or restates the collateral description completely
- Assignments – transfers “full” or “partial” rights in the filing from one secured party to another
- Terminations – extinguishes a financing statement prior to its five-year lapse date
Where and how are UCC3s recorded?
UCC3s are recorded in the same jurisdiction as the effective UCC1 it amends. A step by step process on how to execute a UCC3 filing can be found here .
What are some examples of the critical nature of each UCC3 type?
- Continuations – there is a 6 month window prior to the UCC1 5-year lapse date in which a Continuation must be recorded for it to be effective; Continuations are not effective if recorded after the lapse date and the UCC1 lapses and becomes ineffective
- Party Amendments – these amendments often coincide with name changes and/or address changes to business entity documents of the parties involved; these name changes and address changes typically require amendments to the original UCC1 identifying these changes within a specific time frame; address changes that involve a change of state have specific UCC3 filing protocols for secured parties to follow within specific time frames
- Collateral Amendments – partial releases are executed as a DELETE collateral descriptions, a critical aspect of this type of UCC3; a collateral restatement is a replacement of a prior collateral description, not an addition to that prior description, so a secured party’s security interest in any collateral that is not fully restated in the UCC3 collateral amendment risks becoming unperfected
- Assignments – sometimes a new UCC1 is required instead of an assignment, depending, and failure to recognize what is required in a situation can result in a secured party’s lien becoming ineffective
- Terminations – other parties can terminate a UCC1 besides the secured party; also, RA9 requires no signatures to record terminations; a termination can be recorded by the debtor under certain circumstances; monitoring services are available which alert secured parties to when another party files a termination on one of their UCCs; contact the secured party to verify the effectiveness of a recorded termination.
Once a UCC1 is recorded and a security interest is perfected, a secured party’s focus shifts to maintaining that perfected security interest and managing the UCC1 going forward until it either lapses or is terminated.
UCC3s are a tool which secured parties use to manage that process.
Another important conversation about UCC3s are common mistakes that are made regarding them. Use the button below to download our Free Reference Guide: Top 3 Mistakes on UCC3 Change Statement .
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Ch. 8 The Development of Russia
Ivan i and the rise of moscow, learning objective.
- Outline the key points that helped Moscow become so powerful and how Ivan I accomplished these major victories
- Moscow was considered a small trading outpost under the principality of Vladimir-Suzdal into the 13th century.
- Power struggles and constant raids under the Mongol Empire’s Golden Horde caused once powerful cities, such as Kiev, to struggle financially and culturally.
- Ivan I utilized the relative calm and safety of the northern city of Moscow to entice a larger population and wealth to move there.
- Alliances between Golden Horde leaders and Ivan I saved Moscow from many of the raids and destruction of other centers, like Tver.
A rival city to Moscow that eventually lost favor under the Golden Horde.
Grand Prince of Vladimir
The title given to the ruler of this northern province, where Moscow was situated.
The Rise of Moscow
Moscow was only a small trading outpost in the principality of Vladimir-Suzdal in Kievan Rus’ before the invasion of Mongol forces during the 13th century. However, due to the unstable environment of the Golden Horde, and the deft leadership of Ivan I at a critical time during the 13th century, Moscow became a safe haven of prosperity during his reign. It also became the new seat of power of the Russian Orthodox Church.
Ivan I (also known as Ivan Kalita) was born around 1288 to the Prince of Moscow, Daniil Aleksandrovich. He was born during a time of devastation and upheaval in Rus’. Kiev had been overtaken by the invading Mongol forces in 1240, and most of the Rus’ principalities had been absorbed into the Golden Horde of the Mongol Empire by the time Ivan was born. He ascended to the seat of Prince of Moscow after the death of his father, and then the death of his older brother Yury.
Ivan I. He was born around 1288 and died in either 1340 or 1341, still holding the title of Grand Prince of Vladimir.
Ivan I stepped into a role that had already been expanded by his predecessors. Both his older brother and his father had captured nearby lands, including Kolomna and Mozhaisk. Yury had also made a successful alliance with the Mongol leader Uzbeg Khan and married his sister, securing more power and advantages within the hierarchy of the Golden Horde.
Ivan I continued the family tradition and petitioned the leaders of the Golden Horde to gain the seat of Grand Prince of Vladimir. His other three rivals, all princes of Tver, had previously been granted the title in prior years. However they were all subsequently deprived of the title and all three aspiring princes also eventually ended up murdered. Ivan I, on the other hand, garnered the title from Khan Muhammad Ozbeg in 1328. This new title, which he kept until his death around 1340, meant he could collect taxes from the Russian lands as a ruling prince and position his tiny city as a major player in the Vladimir region.
During this time of upheaval, the tiny outpost of Moscow had multiple advantages that repositioned this town and set it up for future prosperity under Ivan I. Three major contributing factors helped Ivan I relocate power to this area:
- It was situated in between other major principalities on the east and west so it was often protected from the more devastating invasions.
- This relative safety, compared to Tver and Ryazan, for example, started to bring in tax-paying citizens who wanted a safe place to build a home and earn a livelihood.
- Finally, Moscow was set up perfectly along the trade route from Novgorod to the Volga River, giving it an economic advantage from the start.
Ivan I also spurred on the growth of Moscow by actively recruiting people to move to the region. In addition, he bought the freedom of people who had been captured by the extensive Mongol raids. These recruits further bolstered the population of Moscow. Finally, he focused his attention on establishing peace and routing out thieves and raiding parties in the region, making for a safe and calm metaphorical island in a storm of unsettled political and military upsets.
Kievan Rus’ 1220-1240. This map illustrates the power dynamics at play during the 13th century shortly before Ivan I was born. Sarai, the capital of the Golden Horde, sat to the southeast, while Moscow (not visible on this map) was tucked up in the northern forests of Vladimir-Suzdal.
Ivan I knew that the peace of his region depended upon keeping up an alliance with the Golden Horde, which he did faithfully. Moscow’s increased wealth during this era also allowed him to loan money to neighboring principalities. These regions then became indebted to Moscow, bolstering its political and financial position.
In addition, a few neighboring cities and villages were subsumed into Moscow during the 1320s and 1330s, including Uglich, Belozero, and Galich. These shifts slowly transformed the tiny trading outpost into a bustling city center in the northern forests of what was once Kievan Rus’.
Russian Orthodox Church and The Center of Moscow
Ivan I committed some of Moscow’s new wealth to building a splendid city center and creating an iconic religious setting. He built stone churches in the center of Moscow with his newly gained wealth. Ivan I also tempted one of the most important religious leaders in Rus’, the Orthodox Metropolitan Peter, to the city of Moscow. Before the rule of the Golden Horde the original Russian Orthodox Church was based in Kiev. After years of devastation, Metropolitan Peter transferred the seat of power to Moscow where a new Renaissance of culture was blossoming. This perfectly timed transformation of Moscow coincided with the decades of devastation in Kiev, effectively transferring power to the north once again.
Peter of Moscow and scenes from his life as depicted in a 15th-century icon. This religious leader helped bring cultural power to Moscow by moving the seat of the Russian Orthodox Church there during Ivan I’s reign.
One of the most lasting accomplishments of Ivan I was to petition the Khan based in Sarai to designate his son, who would become Simeon the Proud, as the heir to the title of Grand Prince of Vladimir. This agreement a line of succession that meant the ruling head of Moscow would almost always hold power over the principality of Vladimir, ensuring Moscow held a powerful position for decades to come.
- Boundless World History. Authored by : Boundless. Located at : https://www.boundless.com/world-history/textbooks/boundless-world-history-textbook/ . License : CC BY-SA: Attribution-ShareAlike
Department of English
An assignment prompt for a First-Year Writing course should a) establish the context for student writing, b) define a goal or set of goals (as well as parameters) for the student’s writing, and c) provide explicit information about how the writing project will be evaluated. There are other things an assignment prompt might do, but we would like to emphasize these three: context, writing tasks and goals, and evaluative criteria.
- Context . Context includes the familiar statements of where the class conversation and writing has led or what questions or problems have been set up by the readings. Context might introduce key vocabulary or concepts, and it might remind students of materials that have been discussed in class that may be relevant to this assignment. But context can also include suggestions about what is at stake in addressing these questions and where the inquiry may lead.
- Writing tasks and goals . The assignment prompt should provide specific, feasible goals for the student’s project. In addition to spelling out a chief goal for the thinking required of students (“examine race as a factor of identity”), the prompt should make explicit mention of the specific writing tasks that will serve that goal (“introduce and defend a term that Appiah doesn’t use but that you think belongs in this conversation”). These writing tasks often involve some consideration of genre, audience, or other elements of rhetoric.
- Evaluative criteria . While we discourage you from using a rigid, scaled rubric, we ask that you provide a description of what you will be looking for in student writing and how you will be defining success. This might be a useful place to address the questions of why you’re asking for this work, who the intended audience is, and what components are required. In a recent review of assignment prompts, it was evaluative criteria that were most likely to be missing .
Finally, we’ve found that the best assignment prompts are usually about one page in length. Some instructors provide more context or additional details about process, calendar, or options that take the assignment sheet onto additional pages, which is fine. Nevertheless, do what you can to outline the gist of the project as succinctly and clearly as possible. (And, by the way, please remember to put your name on your assignment materials.)
Access our Database of Assignments here .
English 1011.009: Writing through Literature
Second Essay Assignment
Image by Lucinda Schreiber for NPR
For this assignment, you should select a few texts from the growing class archive, which includes the following texts:
Chapter 2 of Narrative Medicine by Rita Charon
Excerpt from The Emperor of All Maladies by Siddhartha Mukherjee
“Art” by Eric Nelson
“Flu Shot” by David Watts
“The Caves of Lascaux” by Miriam Karmel
“(Un)Body Double: A Rhapsody on Hairless Identity” by Jane E. Schultz
“Devil’s Bait” by Leslie Jamison
“The Road to Carville” by Pat Tompkins
W;t (the film version based on Margaret Edson’s play)
“In the Operating Room” by Mary Borden
Please feel free to draw on others’ essay drafts and illness narratives (with proper citation, of course) where helpful.
In this part of the course, we have been focusing on the gaps that exist within healthcare: gaps in communication, empathy, expectations, experience, knowledge, and the self (just to name a few).
What I’d like you to do in this essay is to explore one of these moments of division – one of the moments when communication breaks down, when we see the limitations of empathy, when we are forced to acknowledge the limitations of our knowledge about the complexities of the body and the self. In other words, where do you see a gap in healthcare? Why do you think this gap exists? What can be done to bridge it? Can it be bridged? Should it be bridged? Develop an essay that features this gap and articulates an argument, engaged with our readings, that you think provides a fresh way to view this situation in healthcare and the stakes involved for different parties and communities at large.
As always, when I am responding to, evaluating, and grading your essays, I will primarily be looking for the following things: (1) evidence of your close and considered engagement with your source material and with the terms of the assignment and (2) a clear sense of your contribution to this ongoing discussion.
Some Logistical Considerations
This essay should be seven pages long and should be set in Times New Roman, 12-point font. Your paper should also have an MLA header, an engaging title, page numbers, one-inch margins, and it should be stapled whenever submitted in hard copy.
Wednesday, October 8: Post your first draft on our HuskyCT Discussion Board by 9 am.
Thursday, October 9-Tuesday, October 21: In-class workshopping of Essay 2; everyone should attend these workshops prepared to assist in the peer review process.
Tuesday, October 28: The final draft of your essay is due by class time ; please post your final draft on our HuskyCT Discussion Board by 1 pm.