Quick answer
A UCC lien is a public filing (UCC-1) that gives a lender a security interest in business assets such as receivables. Factors usually require a first-position lien on receivables.
How UCC filings work
Lenders file a UCC-1 with the Secretary of State where your business is organized. It's public and lasts five years unless terminated.
Blanket liens
Many bank loans and MCAs file blanket liens that cover receivables, which can block factoring until subordinated or paid off.
Removing a lien
Once a loan is paid, ask the lender to file a UCC-3 termination.
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Written and reviewed by the National Invoice Factoring funding team — specialists in receivables and trade finance since 2009.
