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The Uniform Commercial Code (UCC)
One of the most powerful tools available to consultants for seeking prospective clients is their state's UCC site. Learning to use this tool can greatly enhance your productivity.

What is the UCC?
UCC stands for the Uniform Commercial Code. It is basically a body of commercial law which sets forth certain transactional standards and allows businesses to operate by these standards, thus eliminating the need to hire an attorney for each and every small transaction. More importantly for brokers and consultants, the UCC provides a method of filing notice of lien (called perfection), so that other lenders can ascertain whether a specific collateral has already been secured.

A Source of Prospecting Knowledge
The UCC is a valuable source of knowledge for those that learn how "work" use this tool. By searching the UCC you can learn:

The names of businesses that are currently financed
The address of the borrower
The name of the lender
The collateral that is used as collateral

Savvy brokers will soon be able to ascertain the type of loan that has been made (i.e. factoring, asset-based lending, equipment leasing, etc.) often by looking at the collateral description. This can easily provide you with the opportunity for a "we would like to compete for your business" cold call opportunity to the borrower. A sample of this script is in accessible from the IACFB Resource Center.

UCC-1 Filing Statements
A UCC-1 filing statement is a one page document used to perfect a security lien. It is filed by a bank or other lender as the "Secured Party", references the "Debtor", which is the borrower, and then states the collateral which is encumbered by the financing.

Under the UCC, first to file "wins". If your UCC, for example, is time stamped at noon on a specific date and encumbers a piece of equipment owned by the debtor, any UCC filed after your time stamped date will be a "junior" lender to your "senior" position.

In any factoring transaction, the factor will require a "first" position on all accounts receivable as collateral. No factor will accept a "junior" position.

UCC-3 Modification Statements
A UCC-3 may be filed subsequent to a UCC-1 and modifies the UCC-1 statement. It can change the collateral, change the secured party, extend the filing, or terminate the filing. For factoring brokers, a UCC-3 is sometimes used when a bank is willing to relinquish their senior position on accounts to a factor.

Accessing the UCC in Your State
The UCC database is usually accessible from the Secretary of State's website for any particular state. Roughly, 70% of the databases can be searched for free. Other require a per search charge which rules this excellent marketing opportunity out. Others offer an unlimited search for an annual fee which tends to rule it back in so long as the fee is reasonable.

The UCC & Your Database Manager
Searching the UCC and recording pertinent information regarding a prospect in your Database Manager represents true "Guerrilla Marketing". When you fully understand how to access the UCC database and to read the filing, the public knowledge in the UCC can be an exceptional prospecting tool.