UCC Financing Statement
There are three types of Uniform Commercial Code (UCC) financing statements. UCC1 and UCC2 statements are used to show that there is a lien on property. The UCC3 statement is used when there is a change in the UCC1, such as a release (cancellation), partial or complete assignment of lien, amendment or termination of the loan.
"Property" refers not only to land, but also to vehicles or any type of equipment or personal property, such as furniture, tractors, etc, that has been financed.
Although it is not a requirement by law that a UCC be filed, doing so can be protection for both lien holders and prospective buyers. Most financing statements are filed in the office of the Clerk of Court in the county where the debtor lives. All financing statements, no matter where they are filed and recorded in Georgia, are scanned into a state-wide database accessible via a publicly available computer link in the Clerk of Court's office. The database may be searched using the name of an individual or business.
For example, when a furniture company in Toccoa finances a dining room suite for a customer, the company can file a UCC financing statement with our office to protect its interest in the furniture until the loan is repaid. If the customer decides to sell the furniture in the classified ads, the buyer can check to see if there is a lien on it by checking the UCC statement database.
There are some things to keep in mind when searching the UCC financing statements:
- Search by the property owner's name, whether individual or business.
- If a statement is found, make sure it refers to the property in which you are interested. There is usually a description of the property, including serial numbers (if applicable), on the statement.
- Verify that the lien is/is not paid off by checking to see if a UCC3 (specifically showing termination of the loan) has been filed for that piece of property.
- Important: Remember that just because the loan being searched for has been paid off, there is no guarantee that all loans against that piece of property have been paid in full. Most businesses file financing statements, but again, it is not a requirement.
Staff members of the office of the Clerk of Court are available to answer questions about financing statements or to provide UCC forms. However, they cannot provide legal advice or help in filling out the forms.