When a lender makes a loan to your business, and in the loan agreement takes a security interest (as collateral) in one or more of your assets, it may include a completed UCC-1 financing statement (UCC-1). A UCC-1 is a document that, when properly filed with the state (often the secretary of state’s office), provides notice to potential buyers of those assets, and notice to future creditors of your business that the earlier lender has a priority interest in those assets. Article 9 of the Uniform Commercial Code governs business or commercial transactions (loans, extensions of credit) that are secured by collateral, and provides for use of the UCC-1 filing. Vehicles, office equipment and fixtures, inventory, investment securities, accounts receivable, machinery, letters of credit, and other moveable, tangible items of value often serve as the collateral for a UCC-1.

In New York, when a lender extends a loan to a business and secures the loan with the business's assets, the lender typically files a UCC-1 financing statement. This filing is done with the New York Department of State, Division of Corporations, State Records and Uniform Commercial Code. The UCC-1 serves as a public notice that the lender has a security interest in the specified assets of the business, which may include vehicles, office equipment, inventory, investment securities, accounts receivable, machinery, and other tangible items. Article 9 of the Uniform Commercial Code (UCC) governs these secured transactions. The filing of a UCC-1 is crucial as it establishes the lender's priority in the event of default or bankruptcy, and it alerts potential buyers and future creditors that the lender has a claim on those assets. Failure to properly file a UCC-1 could jeopardize the lender's security interest in the collateral.