Once you’ve paid off your merchant cash advance (MCA), the lender should release the UCC lien on your business. When they refuse or delay, your business may appear encumbered even though the debt is gone. Understanding your rights can help you ensure the record is corrected.
Why lenders must release liens
Under the Uniform Commercial Code (UCC), a secured creditor must file a termination statement once the secured obligation has been fully satisfied. This filing ends the lender’s claim on your business property and restores your ownership record. A lingering lien can misrepresent your creditworthiness and complicate future financing or sales.
What you can do if the lien remains
If a lender refuses to file the termination, you can send a written demand asking them to do so. Include documentation proving payment in full and keep a copy for your records. If the lender does not respond within 20 days, the UCC allows you to file a UCC-5 Information Statement disputing the filing. You may also have the right to file your own termination statement under U.C.C. § 9-509(d)(2) or seek damages for noncompliance under § 9-625.
How to verify the lien release
After the termination is filed, check the Secretary of State’s online database to confirm that the lien status shows “terminated.” Keep a copy of this record for your business files, especially if you plan to apply for credit or sell your business in the future.
Keeping your record clear
You have a legal right to a clean record once your MCA debt is paid. Taking prompt action if a lender fails to comply helps you protect your credit, maintain transparency, and ensure your business remains financially credible.