UCC Lien Impact Calculator
Assess how existing UCC filings affect new MCA funding options, rates, and position priority.
How Do UCC Liens Affect MCA Funding?
A UCC-1 financing statement is a public filing that notifies other creditors of a funder's security interest in a merchant's business assets, specifically future receivables in MCA transactions. Every MCA funder files a UCC lien at funding, and these filings are visible on a UCC search. When a merchant has existing liens, new funders see them during underwriting and use the lien count and amounts to assess risk and position priority. More liens mean more creditors competing for the same daily revenue. Each additional lien raises the factor rate by 5-15 cents (e.g., from 1.25 to 1.30-1.40) and reduces the maximum offer. Knowing the full lien picture tells you what to quote, when a buyout makes more sense, and which funders to submit to for the relevant position.
How to Use This Calculator
Run a UCC search first
Before using this calculator, search the merchant's UCC filings on the Secretary of State website (or use a service like LexisNexis, Dun & Bradstreet, or UCC Direct). Count active filings and note the total amounts.
Determine the proposed position
If you plan to place behind existing liens, select the appropriate position. If you plan to buy out existing positions and take first, select 1st Position.
Review the impact assessment
The calculator estimates the rate premium, available funder options, and recommends whether to proceed as-is, negotiate a buyout, or wait for existing positions to pay down.
Key Concepts
UCC-1 Financing Statement
A legal document filed with the state to publicly notify creditors that a lender has a security interest in a debtor's assets. In MCA, the collateral is future receivables and sometimes all business assets.
Lien Priority
In a default, liens are satisfied in order of filing date. First-in-time, first-in-right. A first-position lien holder has priority over second and subsequent positions for asset recovery.
UCC Termination
When an MCA is fully repaid, the funder should file a UCC-3 termination statement. If they do not (common), the lien remains on record and can confuse future underwriting. Brokers should request termination confirmations for paid-off positions.
Expert Insights
Stale UCCs Are a Hidden Opportunity: Many merchants have UCC liens from fully repaid MCA positions that were never terminated. These stale filings make the merchant appear more encumbered than they are. A broker who identifies stale UCCs and helps the merchant get them terminated can move a merchant from "3rd position" pricing to "1st position" pricing -- a potential 10-20 cent factor rate improvement. Call previous funders and request UCC-3 termination statements.
The Buyout Math: Sometimes buying out an existing position to take first lien priority is more economical than accepting 2nd or 3rd position pricing. If the existing RTR balance is $30K and taking first position drops the factor rate from 1.40 to 1.25 on a $100K deal, the 15-cent improvement saves $15,000 in merchant cost. A buyout deal also earns you full first-position commission instead of reduced stacking commission.
Frequently Asked Questions
Results are estimates for educational purposes only. Actual amounts may vary based on your specific financial situation, market conditions, and other factors. This calculator does not constitute financial advice.
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Deal Structuring Calculator
Find the optimal funding amount, factor rate, and term to maximize merchant affordability and your commission.
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