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UCC-1 Financing Statement

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Definition:

Under the provisions of state Universal Commercial Code statutes, when personal property (equipment, inventory, and other tangible assets of a business) are used as collateral for borrowing, a UCC-1 statement is prepared, signed, and filed. This process is also called "perfecting the security interest" in the property, and this type of loan is a secured loan.

The filing creates a lien against the property, so the borrower may not dispose of the property without paying off the debt.

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