I was reading some articles that suggested that you file some ucc-1 filings in the business name in order to help you build not only your biz credit but also can be used to boost your personal credit as well. Does anyone out there know anything about this and whether its legal or not and if so how and where do you go to get this done. I am really unsure about this. Please explain
Ucc-1 filings to help build your biz credit
Started by
RepoMan31
, Feb 26 2012 03:32 PM
6 replies to this topic
#1
Posted 26 February 2012 - 03:32 PM
#3
Posted 28 February 2012 - 06:30 PM
#4
Posted 28 February 2012 - 11:16 PM
Sully would you please explain... I am at a complete lost.
A UCC-1 is a security agreement that a creditor would have with a business to repay a loan or lease agreement. For instance, let's say you own a bakery and need a new tortilla making machine to expand production. The machine costs a $100K and you cannot afford to pay for it upfront, so you approach a leasing company who agrees to pay for the machine and lease it to you for the next ten years @ $1K per month. The lease company is not just going to deliver you a $100k machine without some security, so they ask you to sign a lease agreement along with a UCC-1 specifically naming the tortilla making machine long with your accounts receivable as collateral. Once the machine is paid for, they should release the UCC-1. However, if you defualt on the payment or file for Bankruptcy, the lease company will try to get their machine back.
The above example is a overly simplified use of a UCC-1 as it can be used for a variety reasons.
#5
Posted 29 February 2012 - 01:56 AM
Sully would you please explain... I am at a complete lost.
A UCC-1 is a security agreement that a creditor would have with a business to repay a loan or lease agreement. For instance, let's say you own a bakery and need a new tortilla making machine to expand production. The machine costs a $100K and you cannot afford to pay for it upfront, so you approach a leasing company who agrees to pay for the machine and lease it to you for the next ten years @ $1K per month. The lease company is not just going to deliver you a $100k machine without some security, so they ask you to sign a lease agreement along with a UCC-1 specifically naming the tortilla making machine long with your accounts receivable as collateral. Once the machine is paid for, they should release the UCC-1. However, if you defualt on the payment or file for Bankruptcy, the lease company will try to get their machine back.
The above example is a overly simplified use of a UCC-1 as it can be used for a variety reasons.
Okay, thanks for a little more clarity. Now, I understand that this agreement would be made public, but how could this help your personal credit and would there be stipulations for p2p contracts? Most importantly, if the creditor does not have a DUNS number would this not be a benefit for building credit in general? Thanks for your assistance in advance.
#6
Posted 03 March 2012 - 07:22 PM
Okay, thanks for a little more clarity. Now, I understand that this agreement would be made public, but how could this help your personal credit and would there be stipulations for p2p contracts? Most importantly, if the creditor does not have a DUNS number would this not be a benefit for building credit in general? Thanks for your assistance in advance.
Yes, it can help your business build credit. Are you seeking accounts receivable or inventory financing?
#7
Posted 04 March 2012 - 04:10 AM
Okay, thanks for a little more clarity. Now, I understand that this agreement would be made public, but how could this help your personal credit and would there be stipulations for p2p contracts? Most importantly, if the creditor does not have a DUNS number would this not be a benefit for building credit in general? Thanks for your assistance in advance.
Yes, it can help your business build credit. Are you seeking accounts receivable or inventory financing?
inventory financing...
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