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What a UCC-1 is, what it covers, how long it lasts, how to look up what is filed against your business, and how to clear it after you pay.
If your MCA agreement mentions a "security interest," the funder has probably filed a public notice called a UCC-1 against your business. It is easy to miss, it can outlast the advance, and the next lender you apply to will see it.
UCC stands for Uniform Commercial Code, a set of business laws that every state has adopted, with local differences. A UCC-1 financing statement is a short public form that tells the world a creditor claims rights in some of your business's property. For an MCA funder, that property is usually your receivables, meaning the sales money coming in.
It is filed with a state office, usually the Secretary of State in the state where your business entity is organized. It is a notice. It does not take any money by itself, and it does not mean you are in default.
Two descriptions matter, and they should match: the one in your contract and the one in the filing.
Check the "collateral" or "security interest" section of your agreement, then look at the filing. If the filing says "all assets" and the agreement says receivables, ask a lawyer whether that matters in your state.
A UCC-1 stays effective for five years. The funder can renew it by filing a continuation, but only in the six months before it would expire. If nobody continues it, it lapses and stops protecting the funder's claim against other creditors.
That timing is the same whether your advance lasted four months or two years. A filing can still be sitting there long after you have paid.
Once an advance is fully paid and nothing more is owed, ask the funder to file a UCC-3 termination. Do it in writing and keep proof of when it was received. Under the model law, a funder must send or file a termination within 20 days after it receives your written demand, once the conditions in the statute are met. For accounts that were sold, as in an MCA, the statute ties the duty to the obligation being discharged, so the exact rule can depend on how your deal is structured.
If the funder does not act, the model law lets a debtor file a termination in some circumstances, and the filing must say you authorized it. Do not do this on your own. Get a lawyer first, because a wrong filing can create its own trouble.
Get a payoff letter in writing before you pay, and ask for the termination and a paid-in-full letter after. See Paying off an MCA early.
Many agreements say that, after a default, the funder may notify the people who owe you money, such as your customers or card processor, and tell them to pay the funder directly. The model law allows this if the contract agrees to it, and after a default in any event. A UCC-1 filing is how the funder puts the public on notice of its claim. Read your event-of-default section to see what triggers that step.
When two creditors claim the same property, the one that filed or perfected first generally has priority. That is why a new lender, an equipment lender or an SBA lender will search UCC filings first. It may ask for a payoff letter, a termination or a subordination agreement before it funds you. An old filing you never cleared can delay a loan you need. This is also how funders see how many advances are stacked on your business; see Stacking and renewals.
The UCC is a model law. Each state adopts it with its own changes, so check your state's version and talk to a lawyer before filing anything or relying on a deadline.
Connect your bank (read-only) and add your agreements. Your reconciliation report is usually ready the same business day.
Check my MCA →Education only, not legal advice. Agreements differ; your contract's exact wording controls.