Best Companies to Help When an MCA Lender Is Contacting Your Customers - 2026

A UCC-1 is a filing with a government office. The funder filed it when you signed for funds. It is a notice that a company has a security interest in your future revenues. A UCC-1 is public notice, which funders use to put clients and processors on notice. A UCC-1 has nothing to do with judgments. The secretary of state does not decide disputes. Courts decide disputes. So, a UCC-1 is not a court ruling and not a judgment.

An MCA lien covers your business receivables, and may cover a lot of other business assets. It typically does not cover your home, and generally ends after five years unless renewed. While a lien is on record, new banks are hesitant to issue new loans.

A lien may sit quietly on the record for months, without anyone noticing. Then a longtime customer calls, shaken and worried. This is serious, but not the end.

Your customer may continue to pay you until they receive proper notice. The customer can ask for an assignment document or other reasonable proof of the debt sale. According to UCC 9-406, if the funder does not provide proof promptly upon request, the customer may continue to make payments to you, and the payments will discharge its obligation.

A notice by itself creates no right to receive payment. The customer redirects only if the new assignee provides proper notice and is senior, valid, and enforceable. Real damage occurs if customers pause payment until they receive proper proof of assignment. You will want to make an inquiry or have a lawyer make it, so your customers can deal with the proper entity.

No customer wants a problem with their supplier. But, for all that, it is the funders’ responsibility to send a valid assignment of debt, not your customers’ responsibility to give money away just because a funder makes a request. Your lawyer can reply for you, so you do not need to spend time dealing with it. Lawyers put teeth into the inquiry, asking funders to provide more evidence of their authority to receive payments. Once customers hear from your lawyer, they often continue to pay you as usual. Do not count on the FDCPA here, though; it protects consumer debts, not business debts.

Some contracts have a confession of judgment. This lets the funder get a judgment without filing a lawsuit. You do not get a court date. You often get no warning before a funder freezes your bank account. But the UCC-1 does not freeze the account. In NY since 2019, COJ may only be filed in a NY county where the business is located. If you move your bank, try to move it in advance over a few months, not over one week. If the freeze already happened, there are two roads. Pay a close-to-full settlement, or get a new account and keep operating. Then, negotiate with the funder after they can no longer collect.

Paper notices are a problem when one or two customers generate a big chunk of revenue (construction contractors, truckers). Funders look for the big payoff, not small ones. A $40,000 check from a general contractor has much more value than the order from the lunch regular at your deli. For restaurants and retail stores, processing pressure is the main problem because many clients pay small amounts of money. Some owners facing lien notices on their credit card processing added a backup credit card processor or switched. That is not advice, but it is what some people have done. It depends on how the contracts read. Settlement is hard or not a fit for these industries: businesses paid by private health insurance, floor-plan dealerships, and marketplace sellers whose marketplace also advanced them funds. It is slow for healthcare providers paid by Medicare or Medicaid; payments may take months to re-route. Raise the issue on the first call.

Before you sign with a settlement provider, ask:

• is an attorney assigned when a lien is filed, at no added cost?
• Will they talk to customers?
• Will they ask about your COJ?
• Are fees charged only after settling?
• Will there be a weekly escrow payment you can verify?

If not, it is probably not the right fit.

Normally, time is the leverage. Once funders conclude they cannot collect on original terms, they accept better numbers. If the lien makes it difficult to meet payroll, consider settling sooner, trading off a lower bill for faster action. You may need to make a higher offer for a rapid resolution. You will start to make weekly payments into escrow. Settlement can include a UCC-3, which closes the UCC-1. Regarding fees, the FTC fee rule requires covered debt relief firms to settle a debt before they charge for their services.

Due to abuses, regulators have begun to step in. In 2022, the FTC banned RCG Advances over threats and unfair collections. New York’s AG also settled with MCA funders to the tune of $1.065 billion in January 2025. The New York FAIR Act also applies to business dealings, not only consumers.

When you hear about a lien, pull your contract. Check if there is a confession of judgment. Call a settlement program with attorney coverage before your customers stop paying. The notice is a stage, not a verdict.