Paying off a merchant cash advance (MCA) is a major step toward financial relief, but if the lender doesn’t remove the UCC lien, your business credit may still suffer. Knowing how to clear the lien ensures your records reflect your true financial standing.
What a UCC lien does
When you accept an MCA, the lender files a UCC-1 statement to claim a security interest in your business assets. This gives public notice that the lender has rights to those assets until the advance is fully repaid. Once you’ve paid the balance, the lien should no longer exist—but it won’t disappear automatically.
How to remove a lien after repayment
After paying off your MCA, contact the lender and request a UCC-3 termination statement. This document officially removes the lien from your business record with the New York Secretary of State. While lenders are expected to file this once payment is complete, some fail to do so, which means you might need to follow up.
Why it’s important to act quickly
Leaving an outdated lien on your record can make it seem like your business still owes money. This can reduce your chances of getting approved for new credit or business funding. Checking your business credit report helps confirm that the lien has been removed.
Keeping your credit file accurate
You can verify your UCC filings through the New York Department of State’s online database. If you find a lien that should have been terminated, contact the lender or file a correction. Staying on top of your records helps maintain your business’s financial integrity and keeps future borrowing options open.