Most advance agreements include one. Here is what it does, and why it matters for your business.
When you sign a merchant cash advance, the agreement almost always includes a UCC-1 filing. It is routine, it is legal, and most owners sign without knowing exactly what it grants. It is worth understanding.
A UCC-1 is a public filing that gives the funder a security interest in specified business assets — often your accounts receivable and, in broad filings, substantially all business assets. It establishes their claim if the business defaults.
A lien is not inherently alarming. Not knowing what you have signed is.
If you are unsure what liens exist against your business or how broad they are, that is a good question to bring to a review. Understanding your obligations is the first step to managing them.
A specialist will walk through your specific advances with you and lay out the real numbers in plain language.
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