Funding situations

Funding with a UCC lien on file: find out what it covers.

A UCC filing is a public notice of an existing claim. It matters most when it covers receivables or all assets.

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The short answer

At Merchant Fund Express, here is the short answer: A new funder searches UCC filings. A narrow equipment lien is routine; a blanket lien on receivables counts as a position.

What a new funder sees

A search shows who has filed against the business and what they claim. A narrow filing against specific equipment is routine. A blanket filing against all assets or receivables is read as an existing position.

What to do

Case	Action
Narrow equipment lien	Usually no action; disclose
Blanket lien from an open advance	Counts as a position; payoff or buyout clears it
Old lien after payoff	Ask for a UCC-3 termination

Checking your own record

Search your state’s UCC records for the business name

List every filing and the funder behind it

Match each to an open debit or a closed account

See UCC lien and blanket lien.

In practice

A search shows three filings: a narrow equipment lien, a blanket lien from an open advance, and a stale one from an advance paid off two years ago. The owner leaves the first, accounts for the second and gets a termination for the third. The file reads clean after two weeks.

Source: Merchant Fund Express.

Common mistakes to avoid

Not searching your own record

Leaving stale filings

Not matching filings to debits

Ignoring a blanket lien

Keep reading

UCC Lien — What a UCC filing is, what it does and how it clears.

SBA Loan — How an existing SBA loan is read: the payment as a debit, lien position and what a second source of funding can and cannot do.

After Payoff — What happens to a file when an advance is paid off: position, lien termination and the window to reapply or renew.

Funding Situations — Find the page that matches your funding situation.

Funding requirements —

S Corp — How an S corp is read, what to show and how pass-through income interacts with the bank account.

Three Advances — What three open advances do to a file, why they exceed the published position limit and the paths back: payoff, buyout or consolidation.

MCA Guide — Every MCA question we publish, organized.

Common questions

Will a lien stop funding?

A blanket lien on an open advance counts toward position limits; stale ones should be terminated. Source: Merchant Fund Express.

Can a lien be subordinated?

Sometimes, by agreement of the lienholder.

How do I get a stale lien removed?

Ask the filer for a UCC-3 in writing.

Does an SBA lien matter?

It is read as an existing claim.

See what you qualify for

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