UCC-1 Financing Statement (UCC-1 Form)
Definition - What does UCC-1 Financing Statement (UCC-1 Form) mean?
A UCC-1 financing statement is a document that a creditor files for the purpose of giving notice that they have an interest in a borrower's asset. This is usually done when a borrower falls into arrears and the potential for liquidation or bankruptcy exists. By filing the UCC-1 form, the lender establishes publicly that they have the right to be recompensed for a debt.
Justipedia explains UCC-1 Financing Statement (UCC-1 Form)
When more than one company files a UCC-1 form against the estate of the same person, the filings become prioritized. In prioritizing the claims, such as over personal property or a vehicle, larger lenders will be given top priority.
The company does not need to file the UCC-1 form simply to solidify their claim since the contract would do that. This is why filing a UCC-1 form is usually reserved for times when lenders believe there is a chance that they may not get paid for reasons of the debtor being financially limited in their ability to repay.