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What is a UCC lien and what does it mean for my business?
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A UCC lien (a UCC-1 financing statement) is a public notice a merchant cash advance funder files with your state to claim a security interest in your business assets and future receivables. It signals to other lenders that the funder has a claim on your business, which can block you from obtaining new financing and can let the funder notify your customers or processors to redirect payments. UCC liens are public record, which is why merchants with multiple advances are easy to identify.
How a UCC lien gets removed
A UCC-1 stays in effect until the funder files a UCC-3 termination, which typically happens after the advance is paid or settled. Clearing the lien is part of a clean resolution — a settled advance with a lingering UCC-1 can still scare off future lenders, so confirm the termination is filed.
Why funders can find you
Because filings are public, any funder can search the UCC database and see every other advance against your business. That's how merchants who are already stacked keep getting cold-called with more offers — and part of why settling the whole stack at once is more effective than picking off one advance.