How to check UCC liens on a business before lending
Search the UCC records in the state where the business was formed, under the exact name on its formation filing, not its trade name. For each filing, note the secured party, the collateral, the filing and lapse dates, and any amendments. A filing lasts five years unless it is continued, and one that covers all assets tells you another lender may claim everything the business owns.
Updated
Search the state where the business was formed
For UCC purposes, a registered organization such as a corporation or LLC is located in the state where it was formed (§ 9-307(e)). That state's law governs where a lender files (§ 9-301(1)), so financing statements against the business are in that state's central filing office (§ 9-501(a)(2)). A Delaware LLC that operates in Florida is searched in Delaware.
For a sole proprietor, the debtor is the owner, who is located at their principal residence (§ 9-307(b)(1)). Search the owner's name in the state where they live.
Section numbers here are from the model Article 9. Each state enacts its own version, sometimes with changes, so the state's text is the one that applies.
Search the exact registered name
The correct debtor name for a registered organization is the name on its most recent filing with its home state that sets or changes that name (§ 9-503(a)(1)). A trade name alone isn't enough (§ 9-503(c)), so a search under a DBA can miss the filings that count.
A filing with a small error in the name still counts if a search under the correct name, using the filing office's standard search logic, would find it (§ 9-506). That makes the name exactly as the state has it the one to search. Take it from the business's Secretary of State record first.
Read each filing
- Debtor
- The name and address the filing was made against. Check it is the business you are about to fund.
- Secured party
- Who claims the collateral: a lender, a lessor, or a representative filing on their behalf.
- Collateral
- What the claim covers. A financing statement may say "all assets" (§ 9-504(2)), but the security agreement behind it sets what is actually covered (§ 9-108(c)).
- Filing date
- When the claim was put on record.
- Lapse date
- Five years after filing (§ 9-515(a)). Unless it is continued, the financing statement stops being effective when it lapses (§ 9-515(c)).
- Amendments
- UCC-3 filings that continue, terminate or amend the original (§ 9-512(a)), or assign it to another secured party (§ 9-514(b)).
Check amendments before you count a filing
- 1
Look for a continuation
A continuation filed in the six months before lapse (§ 9-515(d)) keeps the filing effective for five more years (§ 9-515(e)).
- 2
Look for a termination
An authorized termination statement ends the filing's effectiveness (§ 9-513(d), § 9-510(a)).
- 3
Look for an assignment
An assignment means another party now holds the claim, so the name on the original filing may not be the party you deal with.
- 4
Separate active from lapsed
Count the filings that are still effective. A lapsed or terminated filing is no longer effective, though the debt behind it may still be owed.
What a state UCC search won't show
- Fixture filings, and filings on timber or as-extracted collateral, are made in the office where a mortgage on the real property would be recorded (§ 9-501(a)(1)).
- Federal tax liens are filed in the office the taxpayer's state designates (26 U.S.C. § 6323(f)), which can be in a different state from the UCC search.
- Judgment liens and lawsuits are kept elsewhere. Read how lenders check liens and judgments.
- A debt that was never filed doesn't appear in any search.
Run the search in Entitylight
Search by business name and state. Entitylight searches the state filing office, keeps the filings whose debtor name matches the name searched exactly, and lists each one with its secured party, dates and status, next to the state record and court cases.
UCC filings are searched in 31 states and DC. In other states the report marks UCC filings as not covered instead of showing none. Read how UCC search works, or watch a business to be alerted to new filings after you fund.
Sources
- UCC § 9-108, Sufficiency of description (Cornell LII)
- UCC § 9-301, Law governing perfection (Cornell LII)
- UCC § 9-307, Location of debtor (Cornell LII)
- UCC § 9-501, Filing office (Cornell LII)
- UCC § 9-503, Name of debtor and secured party (Cornell LII)
- UCC § 9-504, Indication of collateral (Cornell LII)
- UCC § 9-506, Effect of errors or omissions (Cornell LII)
- UCC § 9-510, Effectiveness of filed record (Cornell LII)
- UCC § 9-512, Amendment of financing statement (Cornell LII)
- UCC § 9-513, Termination statement (Cornell LII)
- UCC § 9-514, Assignment of powers of secured party (Cornell LII)
- UCC § 9-515, Duration and effectiveness of financing statement (Cornell LII)
- 26 U.S.C. § 6323, Validity and priority of federal tax liens (Cornell LII)
Questions about UCC lien searches
Where do I search UCC filings for an LLC?
In the state where the LLC was formed, which can differ from where it operates. For UCC purposes a registered organization is located in its state of organization (§ 9-307(e)).
How long does a UCC filing last?
Five years from filing. A continuation filed in the six months before it lapses keeps it effective for another five years (§ 9-515).
Should I search under the business's trade name?
Search the legal name from its formation filing. A financing statement that gives only a trade name doesn't sufficiently name the debtor (§ 9-503(c)).
Does "all assets" mean the lender holds everything?
Not necessarily. A financing statement may say "all assets" (§ 9-504(2)), but the collateral is set by the security agreement, which can't describe it that way (§ 9-108(c)).
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