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 Virginia, when a lender provides a loan to a business and secures the loan with the business's assets, a UCC-1 financing statement is often used to establish the lender's priority interest in those assets. The UCC-1 is filed with the state, typically with the Secretary of State's office, to give public notice that the lender has a security interest in the specified collateral. This filing is crucial as it alerts potential buyers and subsequent creditors that the lender has a claim on the assets in the event of default. Article 9 of the Uniform Commercial Code (UCC) regulates these types of secured transactions, and the UCC-1 filing is a key component of this process. Collateral can include various assets such as vehicles, office equipment, inventory, investment securities, accounts receivable, and machinery. Proper filing of a UCC-1 is essential for the lender to maintain a legal claim over the collateral against other creditors.