An MCA Company Filed a UCC Lien on My Business
A UCC lien sounds ominous, and it can create real problems — especially when you try to get other financing — but it is a routine filing with a defined process, and there are ways to deal with it.
A UCC lien can let a funder reach your receivables and block new financing. If one is affecting your business, call us today.
What a UCC Lien on Your Business Means
If you have learned that a merchant cash advance company filed a 'UCC lien' or 'UCC-1' against your business, here is the first thing to know: this is a standard, public filing, not an accusation that you did anything wrong. When you took the advance, the funder almost certainly took a security interest in your business assets — typically your accounts receivable, and sometimes everything the business owns — and a UCC-1 financing statement is how that interest is put on the public record.
Where it bites is in two places. A blanket UCC lien can make it hard to get other financing, because new lenders see the existing claim on your assets. And after a default, the funder's security interest in your receivables can become a tool to collect from the money your customers owe you — sometimes without going to court first. Understanding the lien is how you start to unwind it.
Rapid Restructure helps owners deal with the debt behind the lien by negotiating with the funder — including, where possible, getting the lien released as part of a resolution. We are a debt-restructuring service, not a law firm, and the information below is general education, not legal advice.
What to Do Right Now
- 1
Find out exactly what was filed
UCC filings are public. You can usually look up the UCC-1 through your secretary of state's office to see who filed it and what collateral it claims — your receivables specifically, or all business assets. This tells you the scope of the lien you are dealing with.
- 2
Check whether your receivables are being targeted
After a default, a funder with a security interest in receivables can sometimes notify your customers or card processor to pay it directly. If your incoming payments are being diverted, treat that as urgent and get help right away.
- 3
Be careful about taking on new financing
A blanket lien can complicate or block new loans, and stacking another advance on top is rarely the answer. Before you try to borrow your way out, talk to us — that path often deepens the hole.
- 4
Keep your agreement and any UCC paperwork
Hold on to your MCA agreement and anything related to the filing. When the debt is resolved, you will want to make sure the lien is properly released, and the paperwork matters for that.
- 5
Call us to resolve the debt and the lien
The lien exists because of the underlying advance. We negotiate directly with the funder to resolve that debt — and to get the lien released as part of the deal where we can. The consultation is free and there is no upfront fee.
Not sure what to do first? Talk it through with us today.
Call (305) 306-8384How a UCC Lien Works
Merchant cash advance funders commonly file a UCC-1 financing statement to perfect a security interest in the business's assets — often its accounts receivable and sometimes all business assets (a 'blanket' lien). This is a routine, public filing made under Article 9 of the Uniform Commercial Code; it is recorded with the secretary of state and does not by itself mean the business has done anything wrong.
Because MCAs are typically structured as a purchase of your future receivables, after a default a funder can use UCC Article 9 self-help to tell your customers or card processor to pay it directly, diverting income before it reaches your account — a route that can require no judgment at all.
A blanket UCC-1 lien covering all of a business's assets can interfere with obtaining other financing, because a later lender will typically see the existing filing and may be unwilling to lend without a superior or subordinated position. Among competing secured creditors, priority in the same collateral is generally determined by the order of filing or perfection under UCC Article 9 — the 'first to file or perfect' rule.
When the underlying obligation is satisfied, the secured party is generally expected to terminate the UCC-1 by filing a UCC-3 termination statement, which releases the lien of record. If a funder files a UCC lien that is improper or leaves one in place after the debt is resolved, Article 9 provides mechanisms to demand its correction or termination.
The above is general information, not legal advice. Laws vary by state and change over time. Consult a licensed attorney about your specific situation.
Why a UCC Lien Makes Restructuring Urgent
A UCC lien quietly raises the stakes. As long as it sits on your assets, it can choke off your access to legitimate new financing and, after a default, give the funder a path to your receivables. Each month it stays in place is a month the squeeze continues — which is why resolving the underlying debt sooner rather than later matters.
Trying to borrow around a blanket lien — especially by stacking another advance — usually makes things worse, not better. The cleaner path is to resolve the debt that created the lien, which is exactly what restructuring is designed to do.
How Restructuring Resolves the Debt Behind the Lien
Restructuring is not a new loan and it is not bankruptcy. We contact the MCA funder directly and negotiate to reduce the total payoff, extend the timeline, or both — and, where a lien is involved, to get it released as part of the resolution where possible.
Because we work with these funders regularly, we often know what a particular lender will accept to resolve the debt and release its filing. For many owners, that clears the path back to normal financing and stops the receivables squeeze.
There is no upfront fee and the first conversation is free. If a UCC lien is affecting your business, call us to start unwinding it.
“The UCC lien is what really hurt — I couldn't get a normal loan to stabilize because every lender saw it. Once we settled the advance and the lien came off, I could finally move forward.”
— Construction company owner
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Results vary based on your lenders, balances, and individual circumstances. Rapid Restructure is a debt-restructuring service, not a law firm, and does not provide legal, tax, bankruptcy, or credit-repair advice. Any figures shown — such as potential payment reductions or timelines — are illustrative examples, not guarantees of results. Information about state laws is general in nature, may change, and should not be relied upon as legal advice; consult a licensed attorney for guidance specific to your situation.