Your small business needs some additional funding. Borrowing money from traditional lenders, like banks, can get complicated and bogged down with extra hoops to jump through. One such hoop is known as a UCC Filing.*
How Does a UCC Filing Effect a Secured Loan?
When a lender makes secured money available for a small business owner to borrow, the lender will file what's known as a UCC-1. UCC stands for Uniform Commercial Code. It’s most commonly used for secured small businesses loans.
Think of it like a lien or mortgage on your home. When you buy a home, your home loan provider will have a form of conditional ownership over your property until you fully repay the loan. The UCC-1 filing is a financing statement that shows that the lender has a secured interest in your business assets.
Pitfalls of UCC Filings and Secured Loans
Say you borrow money to purchase a new piece of equipment for your business. The lender may file a UCC-1 financing statement, which will show it has the first right to recover money owed from the sale of the equipment.
Once you pay off your loan, the lender will file a release, and then your equipment will wholly belong to you. Until a release is filed, you wouldn’t be able to sell the equipment for personal gain or put it up as collateral to borrow more money from another lender. Even if you have paid off your loan on that particular piece of equipment, a UCC blanket lien - a situation in which a lien has been placed on all your assets - will prevent you from borrowing again on the same piece of equipment.
Additionally, having a UCC-1 typically prevents you from obtaining another funding source, limiting your business to one lender.
This can certainly complicate matters and interfere with your plans as a business owner. However, borrowing money doesn't automatically have to result in a UCC-1 filing.
A Better Way – Unsecured Small Business Loans
Zion Finance - Lend Up offers unsecured small business loans to borrowers, which means you do not have to put up any collateral. The beauty of that is with no collateral necessary, a UCC-1 filing is not required. What's more, even if you do have a UCC-1, Zion Finance - Lend Up will still lend to you, preventing you from getting stuck with only one source of business funding.
A UCC-1 filing may not seem like a big deal when you first set out to get business funds, but it's vital to understand the potential disadvantages they can cause. In addition to losing out on financing due to a UCC-1 filing, you will also have to contend with filing costs. However, the biggest issue may be the simple fact that a lender will have control over your business, as they must physically file a termination before you are free and clear.
Zion Finance - Lend Up does not require a UCC-1 filing as part of our underwriting, just one benefit that separates us from standard business loan providers.
WE CAN HELP YOU WITH A QUICK LOAN! WITHIN 48HRS
Do you need a quick loan today? Zion Finance - Lend Up can help you with the loan you need, we offer personal loans and loans for business development. To apply e-mail: zionloanfirm.ltd@aol.com
How Does a UCC Filing Effect a Secured Loan?
When a lender makes secured money available for a small business owner to borrow, the lender will file what's known as a UCC-1. UCC stands for Uniform Commercial Code. It’s most commonly used for secured small businesses loans.
Think of it like a lien or mortgage on your home. When you buy a home, your home loan provider will have a form of conditional ownership over your property until you fully repay the loan. The UCC-1 filing is a financing statement that shows that the lender has a secured interest in your business assets.
"The point of UCC-1 is to create a consistent approach to commercial transactions across the country."
Borrowing a secured loan from a traditional lender means collateral comes into play.
Pitfalls of UCC Filings and Secured Loans
Say you borrow money to purchase a new piece of equipment for your business. The lender may file a UCC-1 financing statement, which will show it has the first right to recover money owed from the sale of the equipment.
Once you pay off your loan, the lender will file a release, and then your equipment will wholly belong to you. Until a release is filed, you wouldn’t be able to sell the equipment for personal gain or put it up as collateral to borrow more money from another lender. Even if you have paid off your loan on that particular piece of equipment, a UCC blanket lien - a situation in which a lien has been placed on all your assets - will prevent you from borrowing again on the same piece of equipment.
Additionally, having a UCC-1 typically prevents you from obtaining another funding source, limiting your business to one lender.
This can certainly complicate matters and interfere with your plans as a business owner. However, borrowing money doesn't automatically have to result in a UCC-1 filing.
A Better Way – Unsecured Small Business Loans
Zion Finance - Lend Up offers unsecured small business loans to borrowers, which means you do not have to put up any collateral. The beauty of that is with no collateral necessary, a UCC-1 filing is not required. What's more, even if you do have a UCC-1, Zion Finance - Lend Up will still lend to you, preventing you from getting stuck with only one source of business funding.
A UCC-1 filing may not seem like a big deal when you first set out to get business funds, but it's vital to understand the potential disadvantages they can cause. In addition to losing out on financing due to a UCC-1 filing, you will also have to contend with filing costs. However, the biggest issue may be the simple fact that a lender will have control over your business, as they must physically file a termination before you are free and clear.
Zion Finance - Lend Up does not require a UCC-1 filing as part of our underwriting, just one benefit that separates us from standard business loan providers.
WE CAN HELP YOU WITH A QUICK LOAN! WITHIN 48HRS
Do you need a quick loan today? Zion Finance - Lend Up can help you with the loan you need, we offer personal loans and loans for business development. To apply e-mail: zionloanfirm.ltd@aol.com
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