UCC-1 on Purchased Receivables

A UCC-1, formally a UCC financing statement, is a short public form filed with a state to give record notice of a buyer's or secured party's interest in specific property. When a buyer purchases a provider's claims, the UCC-1 simply puts the world on notice that those particular claims now belong to the buyer. It is a notice document, not a debt and not a charge against the practice.

The scope is what matters. A UCC-1 on purchased receivables names only the claims that were sold. It does not reach the practice's equipment, real estate, bank accounts, or future revenue from other sources.

This is the opposite of an asset-based lending blanket lien. A blanket lien attaches to substantially all of a business's assets and stays in place for the life of the borrowing relationship. A UCC-1 on purchased receivables is narrow by design, because the buyer already owns those specific claims and is only recording that ownership.

For a practice owner, the difference between a narrow UCC-1 and a blanket lien is the difference between selling a defined set of claims and tying up your entire business. A blanket lien can block you from getting other capital, complicate a future sale of the practice, and put assets you never intended to pledge at stake. A UCC-1 limited to purchased receivables leaves the rest of your practice unencumbered.

When Copay purchases your eligible claims, it files a UCC-1 on those purchased receivables to record that it owns them. The filing is limited to the claims Copay buys. It is not a blanket lien on your practice, and because this is a true sale rather than a loan, there is no personal guarantee and no claim against your other business assets.

See how Copay purchases your claims.