UCC-3 Termination: Meaning in a Merchant Cash Advance
A UCC-3 termination is the filing that ends a funder's UCC-1 financing statement, the public notice that it has a claim on your receivables or assets. Once your advance is paid off, the funder should file it. If it doesn't, the old lien keeps showing up in searches by banks and other funders. Under UCC § 9-513, you can demand one once nothing is owed.
Where does it show up?
It isn't in the contract. It's filed with the secretary of state where the UCC-1 was filed. Ask for it in your payoff paperwork.
What if the funder doesn't file one?
Send a written request after payoff and attach the zero-balance letter. The UCC sets a deadline for the secured party to file once you ask, and you can search the state filing office to confirm it went through. Keep the request and the response with your payoff letter.
What does it look like in practice?
You pay off in the spring. In the fall, a bank reviewing a loan finds the old funder's UCC-1 still active and asks for proof it's released. A filed UCC-3, or the zero-balance letter plus a demand, settles it.
Which owner question goes with this term?
How do I get a payoff letter for an MCA? Answers to the questions owners ask about this term, with what to ask the funder.
A term on your offer you don't recognize?
Send us the line and we'll tell you what it means. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.