What Just Happened
If you received notice of a UCC filing or discovered it through a search, the funder has filed a UCC-1 financing statement with your Secretary of State claiming a security interest in your business assets. This is standard practice and almost certainly authorized by your contract.
Is This Normal?
Yes. Virtually every MCA funder files a UCC-1 at funding. It does not mean you are in default or that legal action is being taken. It means the funder is protecting their interest in the receivables they purchased and potentially other assets depending on the lien scope.
What the Lien Covers
Check the collateral description on the filing. It may cover only accounts receivable and payment intangibles, which is appropriate for an MCA. Or it may be a blanket lien covering all assets including accounts, inventory, equipment, general intangibles, and proceeds. A blanket lien is more restrictive. Review your contract to see what you actually authorized.
How This Affects You Right Now
While current on payments, the lien has limited daily impact. But it immediately affects your ability to obtain other financing since lenders check UCC filings during underwriting. It creates a public record visible to creditors and partners. And if you have multiple MCAs, lien priority determines which funder has the strongest position if things go wrong.
What to Do
- Review the filing. Search your Secretary of State website. Note the filing number, date, and collateral description.
- Compare to your contract. If the lien covers more than authorized, you may challenge the scope.
- Plan ahead. Once the MCA is paid off, demand a UCC-3 termination. Do not assume automatic removal.
- If struggling with payments, contact an attorney. The lien adds urgency to resolution because it blocks access to other financing.