Why UCC Filings Need to Be Removed
A UCC-1 financing statement filed by an MCA funder remains on public record even after the MCA is fully repaid. If the funder does not file a termination statement, the lien continues to appear on your business credit profile and in searches by potential lenders. This blocks future financing, damages business relationships, and creates a false impression that your business is still encumbered.
Step 1: Confirm the Debt Is Resolved
Before requesting removal, verify the underlying MCA obligation is fully satisfied. This means the advance was repaid in full, a settlement was completed and all terms met, or the agreement was voided by court order. Gather documentation proving resolution.
Step 2: Request a UCC-3 Termination Statement
Send a formal written request to the MCA funder demanding they file a UCC-3 termination. Include your business name and address, the UCC filing number, documentation showing the obligation is satisfied, and a deadline for compliance, typically 20 days. Under UCC Section 9-513, a secured party must file a termination within 20 days after receiving an authenticated demand when the obligation has been satisfied.
Step 3: File Your Own Termination if the Funder Refuses
If the funder ignores your request, UCC Section 9-509(d)(2) allows you to file a termination statement yourself. You can also seek a court order compelling the filing. The funder may be liable for actual damages caused by wrongful failure to terminate, plus statutory penalties in some states.
Step 4: Verify Removal
After the termination is filed, verify it shows as terminated in Secretary of State records. Also check business credit reports through Dun and Bradstreet, Experian Business, and Equifax Business. If the filing still appears active despite termination, dispute it with the reporting agency.
When to Involve an Attorney
If the funder disputes the obligation, refuses to file, or the UCC filing is causing you to lose financing opportunities, an attorney can expedite through legal demands, court motions, and damage claims.