UCC financing statement
Before the lender can take the possession of the collateral, he files a form called the Uniform commercial code form to the government. This is usually done so that the lender who files the UCC financing statement first take the collateral if the borrower takes a loan from another lender.
UCC financing statement
UCC financing statement means the Uniform Commercial Code which contains the UCC 1 statement which describes and list property that are personal which is the collateral provided by a borrower for the loan collected. This document is usually filed by the government which can either be any appropriate official of the secretary of the state.
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This financial statement is time stamped and also assigned with a number known as the file number and this gives the lender the right to secure the collateral if the borrower defaults on the loan. The UCC is a form that is legally filed by the lender to show that he or she has interest in the borrower personal property. The lender can be referred to as the creditor while the borrower is referred to as the debtor.
The purpose of filing this form is to give perfection to the security interest of the lender/ creditor. And this is done by giving notice publicly that the possession and selling of the property for the repayment of the debt has been given to the lender as right. This notice of ownership are usually seen in the local or state newspaper. The lender are entitled to the collateral if the borrower in which the collateral is collected from when they want to lend the money should default on the loan.
So before the lender can take the possession of the collateral, he files a form called the Uniform commercial code form to the government. This is usually done so that the lender who files the UCC financing statement first take the collateral if the borrower takes a loan from another lender with the same collateral and then defaults. The lender establishes priority relatively to the other lenders of the borrower once the form is filed out. You can also call this process, security interest perfection while the type of loan taken in this process is called the secured loan.
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UCC statements information requited:
- The name of the borrower and his or her address
- The name of the creditor and his address
- The collateral indication.
The UCC financing statement is publicly filed with the secretary of the state that is the state where the borrower lives or located if the borrower is an individual but if the borrower is an organization, it would be the state where the corporation is incorporated. The state secretary has state agency that works and operates under it from many states and they are tasked with the business activities and organizations overseeing, with the financing receipt inclusive.
If the collateral to be given is tied with another real property that is fixed, there would be an exception in which case the filing would be made in the state where the location of the property is. This is usually in the district court or the recording office as this is where such records would be found by the third parties.
If the loan is secured by the borrower personal property, the notice of lien is given by the financing statements being filed against the personal property so as to get the other creditors of the property to know the security interest on the property. if the financing statement is filed by the lessor of the fixture, the notice of interest of the lessors to other lessors that got the interest in relation to the fixtures and related property is being given by the financing statement.
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No lien or any additional rights is created by the financing statement against a leaseholder in the favor of the lessor. The notice of the rights to the lender is just given by the financing statement under the documents of the loan and also to the lessor the rights they have under the documents of the lease.