Glossary · Doing the deal
UCC lien
In short
The lender's public claim on the business's assets as collateral. Standard on every 7(a).
What it means in a deal
When you close an SBA 7(a) loan, the lender files a UCC-1 financing statement with the state, creating a public record of their security interest in the business's assets. This means if you default, the lender has the right to seize the collateral — equipment, inventory, accounts receivable, and any other business property. The UCC lien also signals to future creditors that the assets are encumbered. It releases automatically when the loan is paid off.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
Last checked 2026-06-16. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about UCC lien
- What are the specific requirements for a lender to obtain a valid first lien position on UCC collateral when prior liens exist?
- Is a UCC-1 filing sufficient to perfect a lien on business assets?
- If a lender obtains a blanket lien, what are the key UCC filing requirements for interstate operations?
- What if the business assets are located in multiple states, requiring multiple UCC filings?
- When must a lender take a lien on specific equipment for collateral, beyond a blanket lien?
- What are the specific lien priority requirements for lenders on both business and personal collateral securing a 7(a) loan, particularly when junior liens exist?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-16 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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