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 Wisconsin, 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 priority interest in those assets. The UCC-1 is filed with the Wisconsin Department of Financial Institutions, which serves as the state's filing office. This filing serves as a public notice that the lender has a security interest in the specified assets of the business, which could include vehicles, office equipment, inventory, accounts receivable, and other tangible items. Article 9 of the Uniform Commercial Code (UCC) governs these secured transactions. The filing of a UCC-1 is crucial because it establishes the lender's priority over other creditors in the event of default or bankruptcy. It is important for businesses to understand that failing to properly file a UCC-1 could result in a loss of priority for the lender's security interest in the collateral.