UCC filing (UCC-1)

Definition

The public notice a lender files with the state to record its lien on a business's assets, naming what it can claim if the loan is not repaid.

Why It Matters

Two of these matter to a buyer, in opposite directions. The ones already on file against the business are the seller's debts, and they have to be paid off and released at closing or the equipment you just bought still answers to somebody else, which is why payoff letters and lien releases belong in the funds flow rather than in a promise for next week. The one your own lender files is what turns the loan documents into a claim on everything the business owns, so read what it covers before signing, not after.