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 Pennsylvania, when a lender provides a loan to a business and secures the loan with the business's assets, they often use a UCC-1 financing statement to establish their interest in the collateral. The UCC-1 is filed with the Pennsylvania Department of State, which puts potential buyers and future creditors on notice that the lender has a priority claim on the assets listed as collateral. This process is governed by Article 9 of the Uniform Commercial Code (UCC), which applies to secured transactions involving various types of personal property, including vehicles, office equipment, inventory, investment securities, accounts receivable, and machinery. Filing a UCC-1 is a critical step for lenders to protect their interest and ensure priority over other creditors in the event of default or bankruptcy of the borrower.