- Home
- Bankruptcy and Bankruptcy Code
- Business Entities
- Departmental Operations
- Credit Practices
- Collection Practices
- Financial Analysis
- Financing Methods
- International Credit
- Laws and Regulations
- Payment Methods
- Performance Measures
- Security Instruments
- Ancillary Guarantee
- Corporate Guaranty
- Credit Insurance
- Corporate Guaranty; Intercorporate Guarantys, Guaranties
- Guarantees: Personal; Personal Guaranty; PG
- Performance Bonds
- Personal or Corporate Guaranty
- Credit Insurance Policy Deductible
- Determining Trade Credit Insurance Premiums and Deductibles
- Promissory Notes
- Uniform Commercial Code; UCC
- Becoming a Secured Creditor
- UCC -1 Financing
- Career Management, and Job Change
- Credit Website Tools
- Upcoming Educational Events
- Credit and Collections Tools and Tips
- Tips on Creating Better Emails
- Generating Effective Credit Correspondence
- Exporting
- Accounting
UCC -1 Financing
Obtaining a security interest is an important step for any creditor to protect its rights in the event of payment default or bankruptcy.
Once the assets to be pledged as collateral are identified by the debtor, the next step in becoming a secured creditor involves getting the debtor to sign a Security Agreement. This Security Agreement is a contract that grants security to the creditor in asset(s) of the debtor and includes a detailed description of the pledged collateral. To become a secured creditor, the seller must obtain and maintain the documentary requirements mandated under the Uniform Commercial Code. The UCC -1 is a document listomg the collateral your company holds as security. UCC - 1 Financing Statements must be filed with the appropriate state and in some cases local government offices. The Security Agreement is usually filed along with the UCC-1 Financing Statement.
One final suggestion: Ask customers to sign a UCC-1 financing statement even if you have no intention of perfecting it. Having this document on file may convince the debtor that you are a secured creditor, and deserve a higher priority for payment than general unsecured creditors.
© 2011 by Michael C. Dennis. All Rights Reserved. Michael is the author of "Credit and Collection Handbook."