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A UCC LIEN
By: Jake Jackson, Tue May 25th, 2010
While there are indicators that the overall economy is improving, still many personal and business finances are in turmoil. As a consequence, banks are tightening requirements for loans. With increases in bankruptcy, businesses are finding credit markets very tight. A business, just starting out or looking for capital, has a real need for a company that can correctly interpret the requirements of the UCC codes so that the process can work quickly and efficiently in its favor.
The UCC, Uniform Commercial Code, codified law, establishes rules on how to conduct business and serves to standardize the law for new corporations, lenders and borrowers using secured property. A UCC filing records the transaction in the public record. For example, when forming a LLC or confirming a UCC lien, the UCC filing allows other financial institutions, as well as local, state, or federal government, to check for conflicts for the collateral used for a secured debt and established the legal rights of the lender.
Loans, personal or business, require the 3 C’s; credibility/character, and capacity, aka collateral. These factors are used as predictors for lenders as to a borrower’s ability to repay the loan. Expect to file with the UCC as part of the loan process. Property used for secured loans may include any equipment, office furniture and equipment, machinery, and vehicles. Secured property may include goods for sale, banknotes, and investment securities, basically any assets that are not nailed down. Expect tenets of the loan to define terms of the collateral such as location, storage, environment, maintenance, and moving of said property. Property used for collateral is valued by a certified appraiser to establish fair market value. This process protects the lender and determines the order lenders will be paid in case of default. Typically, when applying for a secured loan, the following are required: UCC filings, financial statements, credit reports, budgets, business documents, loan applications, and a plan for payback. When the terms of the loan are repaid, the UCC is released.
While there are online resources for consumers, this is not a do it yourself process. The best information source is a professional document filing service. Cal Title-Search, Inc. is a nationwide leader in the industry and has a long standing reputation of providing the highest quality service and customer support in the industry. Cal Title-Search has partnered with attorneys, banks, escrow, and CPA firms to provide cost effective and efficient document filing and retrieval services. You value your business and so does Cal Title-Search, Inc.