Free UCC Search Here. Take Advantage of it.
There has been an ongoing debate in the Merchant Cash Advance(MCA) space for over a year. Should UCC’s be filed or not? Resellers looking to keep acquisition costs down often use UCC lists to target potential clients. A UCC-1 is a public claim to property whether it be tangible or intangible. Leasing companies, lenders, and governments are the most common secured parties in a UCC-1.
To avoid outside solicitation, some MCA providers are filing under secret secured party names or not filing at all. That’s an issue in itself that we’ve covered previously in “Let’s Play Solve That UCC Filing!” But while the Merchant Cash Advance space tries to move forward, there is another problem on the horizon, merchant awareness of UCC filings.
According to an interview with Mainstreet.com, 4,568 businesses were sold on the website BizBuySell.com in 2010 alone. Some buyers got more than they bargained for. An independent collection agent shared this with us: “Some merchants try to escape their contract terms by selling their buisiness. In the vast majority of those cases, the buyer is completely unaware that the future credit card sales are due to a MCA provider.” He paused, shook his head, and continued “They say that the previous owner never mentioned anything to them about that.” In 2011, it’s hard to imagine that due diligence is not extending past the word of one person. The collection agent then showed us that in each case, a UCC-1 had been properly filed. The new business owner was in fact liable to fulfill the obligations.
UCC’s are not hidden in some secret database that only a high paid lawyer can get to. In fact, many states allow individuals to do unlimited checks for FREE. If you’re a business owner, prospective business owner, MCA underwriter, MCA reseller, lawyer, or accountant, you need to be handy with UCC searches. Searching on its own doesn’t help if you don’t know what you’re searching for, review this summary of MCA provider filing names. Ready?
– The Merchant Cash Advance Resource
Both images copyrighted by 123RFLast modified: February 21, 2013
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.