What Is a UCC-1 Filing? What Every Merchant Should Know

When you take MCA funding, your funder files a document with your state government. It's public record. Anyone can search it. And it's the reason your phone hasn't stopped ringing since you signed.

Here's what a UCC-1 filing is, what it means for your business, and what you can do about it.

What UCC-1 Means

UCC stands for Uniform Commercial Code — a set of laws that govern commercial transactions across the United States. A UCC-1 Financing Statement is a document a creditor files to publicly declare that they have a security interest in a debtor's assets or future receivables.

In plain English: when your MCA funder files a UCC-1, they are telling the world that they have a claim on your future revenue until you pay back the advance.

The filing goes to your state's Secretary of State office. It becomes part of the public record the day it's filed.

What's In the Filing

A UCC-1 filing contains:

• Your business name and address
• Your funder's name and address
• A description of the collateral — usually "all assets" or "all future receivables"
• The date of filing

What it does not contain: the amount you borrowed, your factor rate, your daily payment, or any of the financial terms of your deal. Just the fact that a security interest exists.

Why Every MCA Funder Files One

MCA funders file UCC-1s to protect their legal position. The filing establishes their priority claim on your receivables ahead of any other creditor who might come along later.

If you take a second MCA while the first is still active, the second funder's UCC filing comes after the first. In a dispute or default situation, the first funder has legal priority. This is one reason why stacking multiple MCAs is so dangerous — and why many MCA contracts prohibit taking additional financing without the funder's consent.

The filing also serves as a public signal to other lenders that you have active MCA funding. Banks, equipment lenders, and other creditors check UCC filings as part of underwriting. An active UCC lien from an MCA funder can complicate or block other financing.

Why the Calls Start Immediately

UCC-1 filings are public record and updated in real time. Data companies pull these filings continuously from every state's database. They sell lists of businesses with active UCC filings to other MCA funders, brokers, and lead generation companies.

The moment your funder's UCC-1 hits the state database — usually within days of funding — your business appears on those lists. Other funders buy the list. Their sales teams start calling.

This is not a coincidence and it is not random. It is a direct result of the public filing your funder made when they advanced you money. The calls, texts, and emails are not coming from your funder — they're coming from competitors who bought data identifying you as an active MCA borrower.

What "All Assets" Actually Means

Most MCA UCC filings describe the collateral as "all assets" or "all personal property." This is broader than it sounds.

It means the funder's security interest covers your business bank accounts, accounts receivable, inventory, equipment, and future revenue — essentially everything the business owns or will earn.

In practice, MCA funders rarely pursue physical business assets in a dispute. Their interest is in your receivables. But the "all assets" language gives them legal standing to go further if necessary, and it is language that other creditors will see when they check your UCC filing history.

How Long the Filing Stays Active

A UCC-1 filing is valid for five years from the date of filing. After five years it lapses automatically — unless the funder files a UCC-3 Continuation Statement to extend it.

Here's what most merchants don't know: the filing does not automatically disappear when you pay off your advance. Your funder has to file a UCC-3 Termination Statement to remove it. Many funders don't do this automatically. Some do it weeks or months after payoff. Some never do it unless you ask.

Until that termination is filed, you still appear in databases as having an active MCA lien — even after you've paid in full. That's why the calls keep coming after you've paid off your deal.

How to Get Your UCC Filing Terminated

Once your advance is paid in full, you have the right to request that your funder file a UCC-3 Termination Statement.

Send a written request — email is fine, keep a copy — asking your funder to file the UCC-3 termination confirming your advance is paid. Reference your account number and the date of payoff.

Most funders will comply within a few weeks. If they don't respond or refuse, you can contact your state's Secretary of State office directly. In some states, a debtor can file their own termination statement after a certain period if the secured party fails to do so.

Getting the termination filed stops the data companies from including your business on active MCA borrower lists. It won't undo lists that were already sold, but it will remove you from future pulls.

How to Search UCC Filings

Every state maintains a public UCC database searchable by business name. To see what filings exist against your business:

Go to your state Secretary of State website and look for "UCC Search" or "UCC Filing Search." Enter your business name exactly as it appears on your MCA contract. The results will show all active filings, the funder names, and the filing dates.

If you see filings from funders you've already paid off, those are candidates for termination requests.

What Gradino Uses UCC Data For

Gradino's Why Funders Keep Calling tool walks you through the connection between your UCC filing and the outreach you're receiving. It identifies what the filing likely contains and explains what you can do about it.

See why funders keep calling →

And if you want to see what else is in your MCA contract beyond the UCC lien — including the clauses that affect your rights during the deal — grade it free at Contract Check.

Grade your MCA contract free →

No signup. No calls. No pitch.

The Bottom Line

The UCC-1 filing is a normal part of MCA funding, but it comes with consequences most funders don't explain. It makes your funding public, it attracts competing lenders, and it can follow you long after you've paid off your advance.

Know what's filed. Know how long it stays active. And know how to get it removed when your deal is done.

Gradino is a free, independent platform for merchants who have taken MCA funding. Merchants never pay. We never call you, sell your data, or take hidden commissions. gradino.com