As an auto financing company, you have the right to file a UCC lien when a business customer acquires an auto loan through your company. This filing protects your interests if the borrower defaults on the vehicle loan, files for bankruptcy, or experiences some other type of financial misfortune. At Consolidated Automotive Services of Indiana, we’d like to share how a UCC filing can benefit your business.
1. How Are UCC Filings Performed?
Auto financing companies file UCC statements when a customer is approved for secured financing on their business vehicle. This statement is then sent to the Secretary of State (within your state of residence), notifying them that the business vehicle purchased by the customer is being used as collateral against their auto loan.
2. What Information Needs to Be on the UCC Filing?
This financial statement needs to have three pieces of information on it:
- Creditor’s name and address
- Debtor’s name and address
- A detailed description of the collateral
3. How Many Years Are the UCC Filings Active?
Once filed with the Secretary of State, the UCC lien filing is public record and active for five years. As the lender, you’ll need to renew the lien every five years, if the business loan is still valid at that time. If there are any changes to the UCC lien, an amendment can be filed, when necessary.
4. What Other Assets Can Have a UCC Lien against Them?
As a lender, you can place UCC filings on other business assets owned by the customer as well. This is done in the event that the customer fails to pay the debt and defaults on the automotive loan. Typical assets that have UCC liens placed on them are property, real estate, and equipment. Most states exclude personal assets like food, furniture, and clothing, as well as specific types of property, such as:
- personal vehicles up to $5,000.
- home value and assets up to $50,000.
- business equipment and tools up to $2,000.
Protect Your Loan with a UCC Filing
Protect your interests with a UCC filing from Consolidated Automotive Services of Indiana. Call us at (812) 988-8300 to request a quote. We serve all 50 states with our title transfer services, heavy equipment titles, replacement titles, and boat and RV titles.
Source: Wood, Meredith. “What Is a UCC Filing? (And Why You Need to Know)” Fundera by NerdWallet. 02 Feb. 2021. Web. 10 Jun. 2021.