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Ty from Nav explains the concept of a UCC filing, often referred to as a UCC lien, which is commonly encountered when applying for a small business loan. UCC stands for Uniform Commercial Code and refers to a legal notice filed with the state where a business operates. When obtaining a small business loan, lenders typically file a UCC notice to publicly indicate their interest or lien against the asset securing the loan. This notice informs future lenders that the collateral used for the current loan is already encumbered, making it unavailable for new loans. The UCC filing can pertain to various types of collateral, such as real estate or business equipment.