In order to discuss what trucking companies need to know about UCCs we need to talk about what they are.
What are UCCs?
UCC stands for Uniform Commercial Code. The short definition is that it is a uniform way to say who owns what for business transactions in one state or across state lines. UCCs apply to transactions such as contracts, the sale of goods, secure transactions, and negotiable instruments such as checks.
The long definition, according to the Uniform Law Commission, is “the Uniform Commercial Code (UCC) is a comprehensive set of laws governing all commercial transactions in the United States. It is not a federal law, but a uniformly adopted state law. Uniformity of law is essential in this area for the interstate transaction of business. Because the UCC has been universally adopted, businesses can enter into contracts with confidence that the terms will be enforced in the same way by the courts of every American jurisdiction. The resulting certainty of business relationships allows businesses to grow and the American economy to thrive. For this reason, the UCC has been called ‘the backbone of American commerce.’”
How Do UCCs Impact Trucking Companies?
From our experience, there are two main things trucking companies need to know about UCCs when seeking working capital assistance.
One significant impact UCCs can have on your trucking business is that some finance companies will file a UCC on your company just because you inquire about their services. There are factoring companies that will do this when you make a simple request, even before you sign any documents. By filing the UCC on your company, they lock you into factoring with them. If you don’t choose to factor with them, you may charge a hefty fee to lift the lien. Likely, no other factoring company will work with you if there is an active UCC filed by another factoring company. Make sure you read all the fine print when filling out online forms to request additional information. Or reach out to us at Tetra Capital. We won’t place a UCC until all contracts are signed, and we are ready to fund.
What can you do if you have questions about UCCs and need to get paid quickly?
UCCs can be very confusing and cause many trucking companies unwanted headaches. If you have questions about how outstanding UCCs can impact your trucking business qualifying for trucking factoring, call us at (801) 676-0182. One of our fantastic team members would be happy to help.