MCA Funder UCC Seizure in New York: How to Protect Your Business Assets

Former law clerk to the Honorable Stuart M. Bernstein, U.S. Bankruptcy Court, S.D.N.Y.

An MCA funder may have a UCC-1 financing statement on file against your business long before there is a default or lawsuit. For many business owners, the filing does not become a real concern until they apply for new financing, try to sell an asset, or start dealing with collection pressure from the funder.

A broad UCC filing can affect receivables, inventory, equipment, and other business assets covered by the MCA security agreement. If the business later defaults, that filing may become part of the funder’s enforcement strategy.

The important thing is to understand what was filed, what collateral the MCA agreement actually covers, and what rights the funder has before assuming the UCC filing gives it unlimited control over the business.

What Is a UCC Seizure by an MCA Funder in New York?

In an MCA transaction, the funder may require the business to grant a security interest in certain business assets. A UCC-1 financing statement can then be filed with the New York Department of State to give public notice of that claimed security interest.

The filing itself is not the same thing as a seizure. It is part of the secured transaction. What the funder can actually do with the collateral depends on the MCA agreement, the security documents, the status of the obligation, applicable law, and any enforcement action that follows.

Three terms are important when looking at this issue:

A merchant cash advance (MCA) is generally structured as the purchase of a business’s future receivables in exchange for an upfront payment. MCA companies typically characterize these transactions as receivables purchases rather than loans. In a dispute, however, the contract label is not always the end of the analysis. How the transaction actually worked can matter.

A UCC-1 financing statement is a public filing that gives notice of a claimed security interest in collateral. In MCA transactions, the collateral description may be broad and can include receivables, inventory, equipment, or other business assets depending on the security agreement.

A UCC-3 termination statement terminates a financing statement when the secured interest has ended, and the requirements for termination have been met. This becomes especially important when an MCA has been paid, settled, or otherwise resolved but the UCC filing is still showing in the public record.

What Assets Can an MCA Funder Reach Under a UCC Lien?

Start with the collateral language in the MCA agreement and security documents.

Some MCA agreements use broad descriptions covering categories such as accounts receivable, inventory, equipment, and other business property. But a UCC-1 does not mean a funder automatically owns every asset listed in the filing or can take whatever it wants without regard to the agreement and applicable enforcement rules.

Real estate is also different from business personal property covered by Article 9. A UCC-1 financing statement generally does not operate as a mortgage on real property.

Personal liability is another separate question. If the business owner signed a personal guarantee, the funder may assert claims against the guarantor depending on the terms of that guarantee and the underlying MCA agreement. The UCC filing against the business and the owner’s potential personal liability should therefore be reviewed separately.

The practical problem can begin before the funder tries to enforce anything.

A broad UCC filing may come up when the business applies for another loan or financing arrangement. A new lender may see an existing secured position and require the MCA lien to be paid, subordinated, terminated, or otherwise addressed before moving forward.

That is why business owners should not wait for a lawsuit to find out what is on file.

How Is a UCC Lien Different From a Judgment Lien?

A UCC filing and a judgment are two different things.

A UCC-1 financing statement is generally connected to the security interest created as part of the underlying financing transaction. You can file it without the funder first suing the business and obtaining a judgment.

A judgment comes through a court process. Depending on the case, that may happen after litigation, by default, or through a legally valid confession-of-judgment procedure.

An MCA funder may have a UCC filing connected to the original transaction and later obtain a judgment after a dispute or default. When that happens, the business may face several issues at once.

The distinction matters because challenging the judgment does not necessarily resolve the UCC filing, and dealing with the UCC filing does not necessarily resolve the underlying MCA debt.

Before deciding what to challenge, identify exactly what exists. Pull the UCC filing, MCA agreement, security agreement, any personal guarantee, and any court papers or judgments. Once you know what the funder has and what has already happened, you can determine which issues actually need to be addressed.

How MCA Funders Use UCC Filings to Seize Business Assets in New York

MCA funders often require a UCC-1 financing statement as part of the original transaction. That means the filing may already be in place before the business misses a payment.

If the business later defaults, the funder may rely on its security documents, along with any other rights it has under the MCA agreement, to pursue collection. How quickly that happens and what the funder can actually do depends on the agreement, the collateral, and whether a judgment or other legal process is required.

The Timeline: From MCA Funding to UCC Enforcement

At funding: The business receives the advance, and the funder may file a UCC-1 financing statement covering the collateral described in the security agreement. From that point forward, the filing is part of the public record.

After a missed ACH payment: The funder may declare a default based on the terms of the MCA agreement. What happens next can vary. The funder may send a demand, increase collection efforts, pursue rights connected to its security interest, or take legal action.

If the funder obtains a judgment, additional collection tools may become available, including efforts directed at business bank accounts or other assets.

For a business owner, the key is not to wait until collection reaches that point. If payments are becoming difficult, understanding what happens after an MCA default can help you see what the agreement allows, what the funder has already done, and what needs attention before the situation gets worse.

Confession of Judgment: The Accelerant

A confession of judgment can change how quickly an MCA dispute moves.

A confession of judgment in an MCA agreement may allow a funder to obtain a judgment without going through the ordinary lawsuit process, provided

the confession and filing comply with New York law.

That differs from a standard collection lawsuit, where the business is served and has an opportunity to respond before a judgment is entered.

New York changed its confession of judgment rules in 2019, including restrictions affecting where certain confessions may be filed. Those changes did not eliminate every confession of judgment involving a New York business.

If a funder claims to have a confession of judgment, get the actual documents. Check who signed it, when it was signed, where it was filed, what amount was entered, and whether the filing complied with the requirements that applied to that transaction.

If a judgment has already been entered and the business account has been restrained, review the judgment, bank restraint, MCA agreement, and UCC filing together. They are related, but they are not the same legal issue.

New York’s Commercial Finance Disclosure Law

New York’s commercial finance disclosure rules apply to certain commercial financing transactions and require covered providers to make disclosures about the financing before the business accepts the offer.

For an MCA dispute, those disclosures can be another set of documents worth reviewing.

Compare what the business received before signing with the final MCA agreement and the way payments were actually collected. If you have questions about the disclosures, the agreement, or the funder’s conduct, evaluate those issues based on the specific transaction rather than assuming they automatically invalidate the MCA.

The bigger point is that you shouldn't review the UCC filing in isolation. The financing documents, disclosures, payment history, reconciliation requests, default notices, and collection activity can all matter when determining what rights the funder actually has.

Is Your MCA Agreement Actually a Loan? The New York Three-Factor Test

One of the most important questions in an MCA dispute is whether the transaction was a true purchase of future receivables or functioned as a loan.

The name on the contract does not answer that question on its own.

New York courts may look at the substance of the transaction, including whether repayment was truly tied to the business’s receivables and whether the funder accepted a real risk that it might not be repaid.

That distinction matters because New York’s usury laws generally apply to loans, not true purchases of future receivables.

The Three Factors New York Courts Examine

When reviewing whether an MCA functions as a loan, three issues commonly receive close attention:

1. Reconciliation provision: Does the agreement give the business a real way to adjust payments when its receivables change?

The existence of reconciliation language in the contract matters, but so does how that provision worked in practice. If the business requested an adjustment, what happened? Did the funder change the payment to reflect lower receivables, or did it collect the same amount regardless of revenue?

2. Indefinite repayment term: Is repayment actually dependent on future receivables, or does the agreement effectively require the business to repay a fixed amount on a fixed schedule?

A true receivables purchase generally involves some uncertainty about how quickly the purchased receivables will be generated. If the payment structure effectively guarantees repayment within a set period regardless of business performance, that fact may become important in the analysis.

3. Bankruptcy or insolvency risk: What happens under the agreement if the business fails, becomes insolvent, or files for bankruptcy?

This question goes to who actually bears the risk of nonpayment. If the transaction places substantially all of that risk on the merchant, the agreement may look different from a genuine purchase of uncertain future receivables.

No single fact should be viewed in isolation. The contract language, reconciliation process, payment history, default provisions, and the parties' actual conduct must be considered together.

New York Usury Law and MCA Agreements

Usury can become an important defense in an MCA case, but only after the transaction is determined to be a loan.

That first step matters.

A high factor rate, expensive daily payment, or high effective annual cost does not automatically make an MCA a usurious loan. The transaction must first be evaluated to determine whether it was actually a loan rather than a purchase of receivables.

If the transaction is determined to be a loan, New York’s usury laws may then become relevant, including the criminal usury provisions applicable to interest above the statutory threshold when the required elements are met.

This is why a merchant cash advance defense in New York often starts with how the transaction actually operated. The agreement matters, but the payment history and the funder’s conduct can be just as important.

Why This Matters for UCC Lien Enforcement

The characterization of the MCA can affect more than the funder’s claim for payment.

The UCC filing is connected to the security interest created by the underlying transaction. If the MCA agreement or the funder’s asserted rights under it are successfully challenged, the status of that security interest may also need to be addressed.

That does not mean a UCC-1 automatically disappears because a business raises a loan or usury argument. The underlying claim has to be evaluated and, where necessary, resolved through negotiation or litigation.

For the business owner, the practical approach is to look at the whole transaction. Review the MCA agreement, security agreement, UCC filing, reconciliation history, ACH payments, default notices, and any judgment or collection papers.

Those records show how the deal actually worked, which is where the analysis should begin.

How to Challenge and Remove an MCA UCC Lien in New York

If an MCA funder has a UCC filing against your business, start by finding out exactly what was filed and what agreement supports it.

Depending on the situation, the business may need to address problems with the original filing, negotiate termination as part of a settlement, challenge the funder’s rights under the MCA agreement, or restructure the underlying obligation.

The right approach depends on the documents and where the dispute stands.

Step 1: Search and Audit Your UCC Filings

Start by pulling the UCC filings under your business’s legal name.

Review the filing date, the secured party listed on the financing statement, the debtor name, the collateral description, and any amendments or termination statements filed.

Then compare those records with your MCA agreements and security documents.

If your business has worked with more than one MCA funder, check each filing separately. You may find multiple UCC-1s covering the same asset categories. You may also find an older filing connected to an MCA that has already been paid or settled but was never terminated.

The point of this review is to know what is actually on record before deciding what needs to be challenged or removed.

Step 2: Identify Problems With the UCC-1 Filing

Once you have the UCC-1, compare it with the underlying security agreement.

Questions to look at include:

• Did the agreement authorize the filing?
• Is the debtor’s legal name correct?
• Does the collateral description match the security interest the business actually granted?
• Has the underlying MCA already been paid, settled, or otherwise resolved?
• Are there multiple filings from different funders covering the same assets?

A mistake in a financing statement does not automatically invalidate the entire filing. The effect depends on what is wrong and whether it affects the filing under the rules that apply to secured transactions.

An old UCC filing tied to an obligation that has already been resolved is a different problem. If the funder’s secured interest has ended but the financing statement remains on record, the business should address the termination rather than assuming the filing will disappear on its own.

Step 3: Demand UCC-3 Termination or Pursue Court Relief

If the MCA has been paid, settled, or otherwise resolved in a way that requires the funder’s secured interest to end, make the UCC termination part of the resolution.

Do not rely on a verbal promise that the lien will be addressed later.

The settlement documents should clearly address what happens to the UCC filing and who is responsible for filing the necessary termination. Afterward, confirm that the public record has actually been updated.

If the funder refuses to address a UCC filing that should no longer remain in place, additional legal action may be necessary, depending on the circumstances.

A business dealing with both a UCC filing and a confession of judgment may also need to challenge the judgment separately. Fighting a confession of judgment in New York involves its own procedural questions, so the COJ and the UCC filing should not be treated as though they are the same thing.

Step 4: Negotiate a Settlement or Restructure

Sometimes the dispute is not about whether a UCC filing exists. The bigger problem is that the business can't keep making the MCA payments as originally structured.

That requires looking at the numbers.

How much does the business owe? What are the current daily or weekly withdrawals? Are there other MCA funders? Is the business still generating enough revenue to operate if the payment burden is reduced? Has a judgment already been entered?

Depending on the answers, the business may consider a negotiated settlement, payment restructuring, or another way to address the MCA obligation.

An MCA restructuring should address more than the payment amount. The agreement should also make clear what happens to any UCC filings, judgments, personal guarantees, and other collection rights once the agreed terms are satisfied.

For some businesses, refinancing may also be worth evaluating. But replacing one expensive obligation with another does not solve the problem unless the new financing actually improves the company’s cash flow and resolves the existing liens.

Be especially careful with companies promising to remove MCA debt or UCC filings in exchange for upfront fees. Before signing another agreement, understand who is providing the money, what new obligations the business is taking on, and whether another UCC filing will be added to the existing stack.

Five Mistakes New York Business Owners Make After an MCA Funder Files a UCC Lien

These mistakes can make an already difficult MCA problem harder to resolve. Most come from acting before understanding what the agreement and UCC filing actually allow.

• Assuming the lien only matters if the funder sues. A UCC-1 is already part of the public record. It may come up when the business applies for financing, works with another secured lender, or enters a transaction that requires a UCC search. You don't need to wait for a lawsuit to review the filing.
• Revoking ACH authorization without understanding the MCA agreement. Blocking withdrawals may trigger the contract's default provisions. Before changing ACH instructions, review what the agreement says and what the funder may do next. The goal is to avoid making a cash flow problem worse by triggering additional collection action without a plan to handle it.
• Settling the MCA without addressing the UCC filing. If the business settles, the documents should say what happens to the UCC-1 after the agreed amount is paid. Do not assume the financing statement will automatically be terminated. Confirm termination after the settlement requirements are met.
• Paying another company to “remove” the lien without understanding the new agreement. A company promising consolidation or lien removal may be offering another financing product rather than actually resolving the existing MCA. Read the new agreement carefully and find out whether it requires another security interest, another UCC filing, or additional fees before signing.
• Waiting until after a judgment is entered to deal with the problem. A UCC filing, missed MCA payments, collection demands, and a lawsuit are signs that the situation is moving forward. Once a judgment is entered, the funder may have additional collection options. Reviewing the problem earlier gives the business more time to understand the agreement, evaluate defenses, and decide whether litigation, negotiation, or restructuring makes sense.

The important thing is not to treat the UCC filing as a problem separate from everything else. Review the MCA agreement, payment history, personal guarantee, UCC filings, and any court action together.

That is how you determine what the funder actually has, what the business can challenge, and what needs to be resolved before the company can move forward.

Bankruptcy as a Defense Against MCA UCC Seizure in New York

When a business faces multiple MCA obligations, judgments, bank restraints, or broader creditor pressure, bankruptcy may provide a way to stop collection activity and restructure its debts.

Filing a bankruptcy petition generally triggers the automatic stay. The stay restricts many collection actions against the debtor and property of the bankruptcy estate while the case is pending.

For a business under immediate pressure from MCA funders, the automatic stay can create time to evaluate the company’s finances and determine whether a reorganization is workable.

The Automatic Stay and MCA Funders

The automatic stay generally takes effect when the bankruptcy petition is filed.

For an MCA-burdened business, the automatic stay can affect pending lawsuits, judgment enforcement, bank restraints, and other collection activity against the debtor or the bankruptcy estate.

The stay does not erase an MCA debt or automatically eliminate a secured creditor’s rights. It changes what creditors can do while the bankruptcy case is pending.

An MCA funder that wants to continue certain collection activity may need to ask the bankruptcy court for relief from the automatic stay. Whether the court grants relief depends on the circumstances and the applicable bankruptcy rules.

The distinction between the business and its owners is also important. A bankruptcy filing by the business generally does not automatically extend the stay to a nondebtor owner or guarantor. If the owner signed a personal guarantee, that potential liability needs to be evaluated separately.

For a business facing several collection actions at once, the automatic stay can provide breathing room. But the filing should be part of a larger restructuring strategy, not simply a way to delay one MCA funder.

Chapter 11 and Subchapter V for MCA-Burdened Businesses

Chapter 11 allows a business to reorganize while continuing to operate, subject to the Bankruptcy Code and bankruptcy court oversight.

For a company with MCA debt, a Chapter 11 case may provide a framework for addressing MCA claims alongside other business obligations, rather than negotiating with each creditor separately.

Eligibility for Subchapter V bankruptcy in New York depends on the debt structure and the statutory requirements in effect when the case is filed.

Subchapter V streamlines Chapter 11 for qualifying small business debtors and can reduce some of the procedural and administrative burdens of a traditional Chapter 11 case.

The business still must determine how to treat each MCA claim.

If a funder asserts a secured claim based on a UCC filing, the validity, priority, and extent of that asserted security interest may need to be examined. If there is a dispute over whether the MCA was a true receivables purchase or functioned as a loan, that issue may also become part of the bankruptcy

strategy.

A reorganization plan must then address the company’s debts in a way that complies with the Bankruptcy Code and is financially workable for the business.

That last part matters. Bankruptcy cannot fix a business model that no longer works. The company still needs enough revenue and cash flow to operate and meet the obligations required under its restructuring.

J. Singer Law Group approaches these cases from both the litigation and restructuring sides. Ira Reid previously served as a law clerk to Hon. Cecelia H. Goetz of the U.S. Bankruptcy Court for the Eastern District of New York and spent approximately 20 years as a restructuring partner at Baker McKenzie before joining the firm.

That experience matters when the MCA problem has grown beyond one agreement or one funder.

When Bankruptcy Is and Is Not the Right Tool

Bankruptcy is not always the answer to an MCA UCC problem.

If the business is dealing with one MCA funder and there is a realistic path to settlement, restructuring, or litigation, a bankruptcy filing may not be necessary.

The same is true when the central problem is an old UCC filing connected to an obligation that has already been satisfied. You may be better off addressing that issue directly rather than through a bankruptcy case.

Bankruptcy becomes a different conversation when the business has several MCA funders, multiple UCC filings, judgments, bank restraints, tax obligations, landlord debt, vendor debt, or other creditor pressure that cannot realistically be handled one agreement at a time.

The first question is whether the underlying business is still viable.

What does the company generate in revenue? What does it need to operate each month? How much are MCA funders withdrawing? What other secured and unsecured debt exists? Are there personal guarantees? Can the company operate if it restructures its debt?

Those numbers should drive the decision.

A business that can operate but cannot keep up with its current debt structure may have restructuring options. A business that can't cover operating expenses even after the debt is adjusted may need a different strategy.

That is why the decision to file should come after reviewing the full financial picture.

The UCC filing matters. So do the MCA agreements, judgments, personal guarantees, tax obligations, other secured creditors, and the company’s actual cash flow.

The goal is not bankruptcy for bankruptcy's sake. It is determining whether restructuring gives the business a realistic path forward.

New York Geographic Considerations for MCA UCC Enforcement

Where a UCC financing statement is filed and where an MCA lawsuit or judgment is handled are not always the same thing.

For New York businesses, UCC financing statements covering most business personal property are generally filed through the New York Department of State. Court proceedings involving an MCA dispute, judgment, or confession of judgment are handled separately.

That distinction matters because a business owner may need to look in more than one place to understand what the funder has already done.

NYC Boroughs: Manhattan, Brooklyn, Queens, Bronx

For businesses in Manhattan, Brooklyn, Queens, and the Bronx, the first step is to separate the UCC filing from any court proceeding.

A UCC-1 financing statement may appear in the state filing system, while an MCA lawsuit or judgment will have its own court record. If a confession of judgment is involved, review the filing requirements and venue based on the agreement, the parties, and the law that applied when the confession was entered.

Do not assume that a business located in one borough necessarily has an MCA case pending in that same county.

The MCA agreement may contain provisions addressing venue, governing law, and where disputes can be brought. The court papers ultimately determine where a particular lawsuit or judgment is actually located.

This is especially important when a business first learns about the problem through a bank restraint. Before deciding how to respond, identify the court, index number, judgment creditor, judgment date, and the documents used to obtain the judgment.

Then review the UCC record separately.

A court judgment and a UCC financing statement can exist at the same time, but they involve different rights and different procedures. Searching for only the judgment can leave the business without a clear picture of the UCC filing. Looking only at the UCC filing can miss a lawsuit or judgment that has already moved into collection.

For New York City businesses, you need to review both sides of the problem.

Long Island and Westchester

The same basic distinction applies to businesses on Long Island and in Westchester.

A Nassau County, Suffolk County, or Westchester business may have a UCC financing statement tied to its MCA transaction. At the same time, a related lawsuit or judgment appears in a separate court record.

The business address alone does not tell you where an MCA dispute has been filed.

Review the agreement and the court papers before assuming venue. If a funder has already obtained a judgment, confirm which court entered it and what collection steps have followed.

This becomes particularly important when the owner is trying to challenge a judgment, resolve a UCC filing, negotiate the MCA balance, or obtain new financing.

The business may need to address several issues at once:

The underlying MCA obligation, the UCC filing, any judgment, a personal guarantee, and any bank restraint or other collection activity.

Identify each one before you can build a broader strategy.

Out-of-State Considerations

An MCA dispute can become more complicated when the business operates outside New York, but the agreement contains New York governing-law or venue provisions.

Do not assume that New York law automatically controls every issue simply because the contract says New York law applies.

Choice-of-law provisions, venue provisions, the location of the business, where collateral is located, how a security interest is perfected, and where a judgment is being enforced can raise separate legal questions.

The same caution applies to usury.

If an out-of-state business argues that an MCA functioned as a loan, the first question is whether the transaction can legally be characterized as a loan.

Only then does the analysis move to which state’s law applies and whether a particular usury defense is available.

A New York governing-law provision can be important, but it should not be treated as an automatic answer.

UCC filing rules can also change depending on the debtor and the type of collateral involved. A business should therefore confirm where the financing statement was filed, what collateral it covers, and whether the filing was made in the proper jurisdiction.

If the MCA funder later obtains a New York judgment and attempts to enforce it against assets in another state, additional procedures may apply before collection can proceed there.

For a business operating across state lines, the right place to start is with the documents.

Pull the MCA agreement, security agreement, personal guarantee, UCC filings, court papers, and any judgment or restraint notices. Then identify which state is connected to each part of the dispute.

That makes it possible to separate the questions instead of treating the entire MCA problem as though one state’s law automatically controls everything.

Frequently Asked Questions

How quickly can an MCA funder file a UCC lien against my New York business?

A UCC-1 financing statement may be filed as part of the original MCA transaction, depending on the agreement and security documents.

That means the filing can already be in the public record before the business misses a payment. It does not necessarily appear because the business

defaulted. Instead, it may reflect the security interest the business granted when the MCA was funded.

If you are unsure whether a funder filed a UCC-1, pull the filing and compare it with the MCA agreement and security documents. Check the debtor name, secured party, filing date, collateral description, and any later amendments or termination statements.

The UCC filing tells you what was placed in the public record. The underlying documents tell you what security interest the business actually agreed to

grant.

What assets can an MCA funder seize under a UCC lien in New York?

Start with the collateral description in the security agreement.

An MCA security agreement may cover accounts receivable, inventory, equipment, and other business personal property. Some agreements use broad language covering multiple categories of business assets.

But a UCC-1 financing statement does not give the funder unlimited authority to take anything belonging to the business. The funder’s rights depend on the underlying security agreement, whether its security interest is valid and enforceable, the type of collateral involved, priority issues, and the

enforcement rules that apply.

Real property is treated differently and is generally not covered simply because a UCC-1 financing statement says “all assets.”

Personal liability also needs separate analysis. If an owner signed a personal guarantee, the funder may assert rights against the guarantor under that agreement. A UCC filing against the business does not, by itself, make all of the owner’s personal property collateral.

Can I get an SBA loan if there is a UCC lien on my business from an MCA company?

An existing MCA UCC filing can create a problem when a business applies for SBA-backed or other secured financing, particularly if the new lender requires a different priority position in the business’s assets.

But an existing UCC filing does not mean every SBA loan is automatically unavailable.

The result depends on the existing lien, the collateral involved, the new financing, the lender’s requirements, and whether the MCA funder is willing or required to terminate, subordinate, or otherwise address its security interest.

If a financing application has stalled because an MCA UCC filing appeared during underwriting, find out exactly what the new lender needs. The solution may involve paying or settling the MCA, obtaining a termination, negotiating subordination, or addressing a filing that should no longer remain on record.

Don't assume you can solve the problem simply by filing another financing statement. You need to understand priority and the underlying secured obligations first.

What is the difference between a UCC lien and a judgment lien in the MCA context?

They come from different parts of the MCA relationship.

A UCC-1 financing statement is associated with a security interest granted in connection with the underlying transaction. It is generally filed before the funder obtains a court judgment.

A judgment arises through a court process. That may involve litigation, a default judgment, or a confession of judgment where legally permitted and properly entered.

An MCA funder could have both.

For example, a funder may have a UCC filing connected to the original MCA transaction and later obtain a judgment after an alleged default. The judgment may then provide additional collection remedies that are separate from whatever rights the funder claims under its security agreement.

That is why you shouldn't treat the two interchangeably.

If you are trying to resolve an MCA dispute, identify the UCC filing and any judgment separately. A settlement or court result should make clear what happens to both.

How do I remove a UCC lien filed by an MCA company in New York?

No single answer applies to every MCA UCC filing.

If the underlying obligation has been paid or settled, review whether the secured party must terminate the financing statement, and make sure the termination is completed.

If the business reaches a negotiated settlement, the written agreement should address the UCC filing directly. It should be clear what needs to happen

before termination and who is responsible for taking the necessary steps.

If the filing contains a potentially significant defect, was not properly authorized, remains after the secured obligation has ended, or is connected to an MCA agreement being challenged in litigation, additional remedies may be available depending on the facts.

The business should not simply file its own termination statement without first determining whether it is legally authorized to do so.

A dispute over whether the MCA functioned as a loan can also affect the larger analysis, but raising usury does not automatically erase the UCC filing.

The transaction must first be characterized as a loan before New York’s usury rules become relevant, and any challenge to the funder’s security interest

must be resolved through the appropriate legal process.

The safest approach is to start with the MCA agreement, security documents, UCC filing, payment history, and the obligation's current status. Those records will show which path fits the situation.

Can an MCA funder freeze my bank account in New York without going to court?

A UCC-1 financing statement and a bank restraint based on a judgment are not the same thing.

If a funder has obtained a money judgment, New York judgment-enforcement procedures may allow it to pursue funds held in a business bank account.

A business may first discover the judgment when it learns that its account has been restrained.

A confession of judgment can affect how quickly a judgment is entered because it may allow a creditor to obtain a judgment without the ordinary lawsuit process when the confession and filing comply with New York law.

But a UCC-1 alone should not be confused with a court-issued judgment or restraining notice.

If your business account has been frozen, start with the actual paperwork. Find out who issued or served the restraint, whether a judgment exists, which court entered it, and whether a confession of judgment was involved.

Then pull the MCA agreement, personal guarantee, UCC filing, and court docket.

Those documents will show whether you are dealing with a UCC issue, judgment enforcement, a confession of judgment, or several of those problems at the same time. Once that is clear, you can determine what needs immediate attention and what you can challenge.

Protect Your Business Before the MCA Problem Gets Worse

A UCC filing can affect a business long before an MCA dispute reaches a courtroom. It may come up when you apply for financing, try to sell assets, or start dealing with collection pressure after missed payments.

The important thing is to understand what the funder actually has.

Start with the MCA agreement, security documents, UCC filings, payment history, personal guarantee, and any court papers or judgments. Those records can show what the funder is claiming, what has already happened, and which issues need immediate attention.

For some businesses, the answer may be to negotiate a settlement or restructure the MCA obligation. For others, there may be grounds to challenge the agreement, a judgment, or the funder's asserted security interest. When multiple MCA funders, UCC filings, judgments, or other creditors are involved, you may need to consider a broader restructuring strategy.

J. Singer Law Group represents New York business owners facing MCA disputes, UCC issues, judgments, bank restraints, personal guarantees, and business restructuring matters. The goal is to look at the entire situation before deciding what comes next.

If an MCA UCC filing is blocking new financing, your business account is restrained, or a funder is threatening collection, don't wait until another problem develops.



Call J. Singer Law Group at (917) 905-8280 or contact the firm to discuss your situation.

Strategy. Not just defense.