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What Does a UCC Filing On Your Trucking Company Mean?

It is important for trucking companies to know what a UCC filing is if thinking about or planning to work with a factoring company.

What is a UCC?

UCC stands for Uniform Commercial Code. A UCC is a record of collateralized debt filed by a lender (your factoring company) to your trucking business. The UCC is a unified series of laws that keep track of your business's legal and financial aspects, wherever you are in the United States.

Each state has its own set of laws, and since truck drivers often drive across state lines, a UCC standardizes the law that applies to them no matter the state they operate in. It shows that the factoring company has a secured interest in the carrier or trucking company's business assets and accounts receivable that have been sold to them. A factoring company filed a UCC lien to ensure they have an official list of collateralized assets incase a business loan cannot be paid back, or the broker or shipper doesn't pay an invoice.

Assets covered under the UCC filing will be different depending on the factor. Typically, truck factoring companies only file a UCC on accounts receivables and not other assets.

Why are UCC's filed in factoring?

A UCC filing in trucking is typically a UCC-1 financing statement. When a factoring company signs on a new client, they file a UCC-1. It creates a lien and shows what the business owes and what collateral the factor has the right to possess if there is an issue collecting payment from a resourced freight invoice. The UCC is essentially a safety blanket for the factoring company in case the debtor goes bankrupt.

All factoring companies will file a UCC for a new client. So, don't be surprised when this happens. It also provides information on how many liens are out on your company. It's important to note that too many liens on your business may affect your credit score in the long run, and it may be harder to get business financing. UCCs are public record, and you can see how many your company has on the state department's website.

A debtor (carrier or trucking company) has to give creditors/lenders (the factoring company) a stake in their business assets because the trucking company is borrowing money upfront from the factor. So, if for any reason the debtor fails to pay the business credit they owe, the factor can claim the trucking company's assets in the amount they need.

What are the different types of UCC filings?

There are two types: Collateral Specific UCC Filings and All-Asset UCC Filings.

Collateral Specific

This filing states the factor has a stake in one or some of the trucking company's assets, but not all of them. For example, if a carrier borrows money to purchase a truck, but the carrier fails to pay for it, the factor can take the truck as collateral, but nothing else.


An all-asset UCC filing is also known as a blanket lien. This means the factor has a stake in all of the trucking company's assets. This is more common when taking out a loan with a traditional lender, and the business doesn't have specific assets to use as collateral.

Does a UCC filing affect a factoring agreement?

At some point, a factor will file a UCC for your company, but it's important to know when they do. It happens at some point before your first funding, but some may file it in the application stage before officially signing on. A factoring company should have the trucking companies consent before filing. It can be expensive to remove a UCC, and it must be removed before you can sign on with another factoring company.

Invoice factoring provides trucking companies with consistent cash flow to cover their expenses and grow their business. It does not affect your credit score, and no additional debt is incurred. For more information on how Porter Freight Funding can help grow your trucking business, get in touch today here.

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