The Importance of UCC Filings in Commercial Lending
By Aaron Aguirre
September 5, 2025
Commercial lending is a cornerstone of the financing and banking industries. The majority of commercial loans are secured, whether by real estate, deposit accounts, equipment, receivables, or inventory. To protect their interests, lenders rely on Article 9 of the Uniform Commercial Code (UCC), which provides a standardized structure for securing personal property across the United States. An integral part of this structure is the UCC-1 financing statement, commonly referred to as “UCC filing.”
What Is a UCC Filing?
A UCC-1 filing is a public notice that a lender has a security interest in a borrower’s personal property. Filing a UCC-1 with the appropriate state office perfects the lender’s lien by establishing legal priority over other creditors. Without a proper UCC filing, a lender may lose its rights to collateral, even if the borrower agreed to pledge it.
Why Do UCC Filings Matter?
- Establish Lien Priority – If multiple lenders claim the same collateral, the first to file generally has lien priority.
- Perfects a Security Interest – Ensures lender’s interest in the collateral is legally enforceable.
- Protect Against Other Creditors – In bankruptcy or liquidation, a perfected UCC filing can ensure that the lender has a secured claim.
- Public Notice – The UCC filing is considered a public record, which alerts potential creditors to existing liens and prevents the double pledging of collateral.
What Do UCC Filings Cover?
UCC-1s can cover specific assets (e.g. one piece of equipment) or all assets of a business (commonly known as, “blanket liens”). Some of the most used categories include:
- Inventory;
- Equipment;
- Fixtures;
- General intangibles;
- Accounts receivable; or
- All assets.
Conclusion
Along with a well-drafted security agreement, the UCC filing is an important part of what makes lenders able to confidently extend loans to prospective Borrowers.
About the Author
Aaron Aguirre
Aaron Aguirre is a Loan Documentation Paralegal at SW&M with experience in the banking and insurance industries. Aaron assists in the research, due diligence reviewing, documentation, and processing of the firm’s commercial lending transactions. He works closely with attorneys to […]
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