UCC lien: what a UCC-1 filing against your NEMT company means, and how to get one removed
Overview
A UCC lien is a public UCC-1 financing statement that tells other lenders a creditor claims a security interest in a company's assets. It lasts five years unless continued, and lenders search for it before they lend. After a debt is paid, a signed written demand makes the creditor file or send a termination statement within 20 days.
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What does a UCC-1 filing put on the public record?
A UCC-1 financing statement puts a creditor’s claim on a company’s assets on the public record. People call it a UCC lien, though the code does not use that name. The claim itself comes from the security agreement you signed. The filing makes it public and, under section 9-310, is how a creditor perfects the claim against other creditors in most cases. A lender that takes your receivables as security files one, as the line of credit guide explains.
A filing is sufficient with three things: your name, the creditor’s name, and an indication of the collateral (section 9-502). The collateral can be described as all assets (section 9-504), and the filing can go in before the loan closes. It does not state how much you owe. Signing a security agreement also authorizes the creditor to file one (section 9-509).
Who files one against a ride company?
A bank, an SBA lender, a factor or an advance funder can each file one, and the form of the deal changes what the filing says.
- Banks and SBA lenders. A line of credit or term loan can be secured by receivables or by all business assets.
- Factors and funders. Article 9 covers a sale of accounts as well as a loan (section 9-109), so a company that buys your receivables files like a lender does. The factoring guide and the cash advance guide explain what those agreements add.
- Not your van loan. A lien on a titled vehicle is noted on the certificate of title, and a UCC filing is not how it is perfected (section 9-311).
A filing alone does not redirect any payment. For claims the state pays, 42 CFR 447.10 lets it pay only the provider, with narrow exceptions, and bars payment to or through a factor, so a lender reaches that money after it lands in your account. Money a broker pays follows your broker agreement, which can restrict assignments.
Why can a lien search stop a new loan?
An earlier filing ranks ahead of a later lender on the same assets. Under section 9-322, conflicting perfected security interests rank by the time of filing, so the first filing covering the collateral comes first. A new lender that wants first position on your receivables cannot have it while an earlier all-assets filing stands.
That matters for SBA credit. For a Working Capital CAPLine made without a borrowing base certificate, SOP 50 10 8.1 (effective October 1, 2026) says the lender must take a first lien on the receivables and inventory the line finances. An old funder’s filing can hold up the application until it is terminated or the earlier creditor agrees to rank behind the new lender, which section 9-339 allows. The SBA loan guide covers the rest of that review.
How do you search for UCC filings against your company?
Search the state where the company was formed. The code treats a company organized under a state’s law as located in that state (section 9-307(e)), and the law of the debtor’s location governs perfection (section 9-301), so lenders file there. A sole proprietor is located at a principal residence (section 9-307(b)), so search the state where you live. Use the exact legal name on your formation papers.
States run the search differently:
- New York. The Department of State’s site offers a UCC and lien search by debtor, by filing number and by secured party.
- Delaware. Every search other than a “Search to Reflect” is run by a Delaware Authorized Searcher, drawn from a published list of registered agents, service companies and law firms.
Read each result for the secured party’s name, the collateral wording and the filing date. A creditor you do not recognize, or an all-assets filing from a loan you repaid, is what to chase.
How do you get a UCC lien removed?
Once the debt is paid, a signed demand starts a 20 day clock.
- Pay the debt in full and end any promise of more credit. Ask for a payoff letter.
- Send a signed written demand to the secured party named on the filing, asking for a termination statement.
- Wait 20 days. After a demand, the secured party must send you a termination statement or file one (section 9-513). The same duty applies when the filing covers receivables you sold and the customer that owed them has paid, and when you never authorized the filing.
- File it yourself if it does not. You may file the termination, marked as authorized by you (section 9-509). The secured party that failed to comply owes you $500 plus any actual loss (section 9-625).
- Search again to confirm the filing shows as terminated.
Nobody may file against you without your authorization (section 9-509), and a person who files one anyway owes $500 under section 9-625.
Article 9 is state law. These citations are the uniform text, and each state enacts and numbers its own copy. Texas writes the 20 day rule as section 9.513.
When does a UCC lien end on its own?
A filing is effective for five years from the filing date (section 9-515). The creditor can continue it only by filing a continuation statement within the six months before those five years end, and each continuation adds five more years. A filing that lapses stops perfecting the creditor’s claim, but it does not cancel the debt. Check the date on a filing before you assume it is current.
Frequently asked questions
- If a UCC lien shows up against my company, do I owe the money?
- Not necessarily. The filing shows only that a creditor claims a security interest and which assets it covers. It does not show an amount. A loan may be paid off with the filing still standing, or a filing may be older than the debt. Compare each filing with your own loan records.
- How long does a UCC lien last?
- Five years from the filing date. A creditor can continue it by filing a continuation statement during the six months before the five years end, and again every five years after that. If none is filed, the filing lapses and the creditor's security interest becomes unperfected, though the debt itself remains.
- Can a UCC lien stop my Medicaid or broker payments?
- The filing itself redirects nothing. It only records the creditor's claim. For claims the state Medicaid agency pays, 42 CFR 447.10 lets the state pay only the provider, with narrow exceptions, and bars payment to or through a factor, so a lender reaches that money after it lands in your account. Broker payments follow your broker agreement, which can limit assignments. The factoring guide covers both.
- How do I remove a UCC lien I already paid off?
- Send the secured party a signed written demand for a termination statement. Once nothing is owed and no further loan is promised, it must send you the statement or file it within 20 days. If it does not, you can file the termination yourself, marked as authorized by you, and you can recover $500 plus actual losses.
- Why is a loan on my van missing from a UCC search?
- A lien on a titled vehicle is noted on the certificate of title, not by a UCC filing. Under the uniform code, filing is not effective to perfect a security interest in property covered by a certificate-of-title statute. A UCC search finds liens on other business assets, such as receivables, equipment and general intangibles.
