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 Tennessee, when a lender provides a loan to a business and secures the loan with the business's assets as collateral, they often use a UCC-1 financing statement to establish their interest in those assets. The UCC-1 is filed with the Tennessee Secretary of State's office, which serves to notify potential buyers and future creditors that the lender has a priority interest in the collateral. This process is governed by Article 9 of the Uniform Commercial Code (UCC), which applies to secured transactions involving various types of collateral, including vehicles, office equipment, inventory, investment securities, accounts receivable, machinery, and letters of credit. The proper filing of a UCC-1 is crucial as it establishes the lender's legal claim to the collateral in the event of default and determines the priority of the lender's interest relative to other creditors.