Also known as: financing statement · financing stmt · UCC-1 · UCC financing statement
Written by attorneys · grounded in primary & secondary sources — see below
A public record filed in the appropriate office to give notice of a security interest in personal property or fixtures. Filing perfects the interest against most third parties unless an exception applies for property subject to certificate-of-title statutes or other specified rules.
Flagship Logistics borrowed funds from Fisher Foods and granted a security interest in its warehouse forklifts. Fisher Foods filed a financing statement describing the forklifts in the central filing office of the state where Flagship maintains its principal place of business. When Flagship later defaulted and another creditor claimed the forklifts, Fisher Foods prevailed because the filing provided the required public notice of its interest.
Fusion Power purchased delivery vans on credit from Foster Forge and granted a security interest in the vans. Foster Forge filed a financing statement in the central UCC office but did not note its interest on the certificates of title. When Fusion Power defaulted, a competing lien creditor obtained the vans because the financing statement alone could not perfect the interest in property governed by the state certificate-of-title statute.
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A financing statement must be filed to perfect most security interests in personal property and agricultural liens. Exceptions exist for certain transactions where possession, control, or another method suffices instead.
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No. When property is subject to a certificate-of-title statute, filing a financing statement is neither necessary nor effective. Perfection requires notation on the title under the applicable state law.
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A standard financing statement perfects the interest against the debtor but does not automatically give priority over real-property encumbrancers. A fixture filing in the land records is typically required to achieve priority against a mortgagee.
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