Every commercial financing product deployed in New Jersey — from a bank line of credit to a merchant cash advance to a Sentinel PO financing facility — triggers a UCC-1 financing statement filing. These filings are public records, searchable by anyone, and they determine the legal priority of competing claims against your assets.
For NJ importers using or considering multiple financing facilities, understanding UCC-1 governance is not optional. It determines whether you can access additional capital, in what order lenders get paid in a default, and whether your lien environment is clean enough for institutional financing.
What Is a UCC-1 Financing Statement?
A UCC-1 financing statement is filed with the New Jersey Division of Revenue and Enterprise Services (DORES) and publicly notifies all parties that a secured party (the lender) has a security interest in specific collateral owned by the debtor.
- Filing jurisdiction: For most NJ business entities, UCC-1 filings are made with NJ DORES, regardless of where collateral is physically located.
- Public searchability: Any UCC-1 filed against your entity is publicly searchable. Prospective lenders, suppliers, and buyers can — and do — run UCC searches on counterparties.
- Duration: UCC-1 statements are effective for 5 years. They must be continued via UCC-3 before expiration or they lapse automatically.
Lien Types: What Different Lenders File
Blanket Lien (All-Assets): The most aggressive lien structure. Covers all present and future assets — inventory, A/R, equipment, IP, and deposit accounts. Commonly filed by MCA providers, some factoring companies, and revenue-based lenders. With a blanket lien in place, any subsequent lender takes a junior position on every asset.
Accounts Receivable Lien: Covers only present and future A/R. Filed by most factoring companies. Narrower than a blanket lien but still blocks other A/R-based financing.
Purchase-Money Security Interest (PMSI): A specific lien where the collateral is the asset purchased with the advance proceeds. Under UCC Article 9, a properly perfected PMSI takes priority over a prior blanket lien in the same collateral — even if the blanket lien was filed first. This is the structural advantage of Sentinel's lien approach.
Sentinel's Lien Structure: Why PMSI Matters
Sentinel files a PMSI specifically against the inventory purchased with each PO advance. Three institutional advantages:
1. Super-priority over prior blanket liens: A perfected PMSI in inventory takes priority over a prior all-assets blanket lien on that inventory, provided Sentinel gives proper notice to the blanket lienholder.
2. Narrow collateral footprint: Sentinel's lien does not touch your other assets — equipment, A/R from prior sales, bank accounts, or intellectual property. A bank considering a future credit line sees a clean lien environment on most asset classes.
3. Self-liquidating structure: The PMSI attaches to inventory that is being sold to generate repayment. As inventory is sold and proceeds collected, the lien naturally releases.
Current Lien Environment: Sentinel's Approach
| Lien Situation | Sentinel's Ability to Fund |
|---|---|
| No existing liens | Full PMSI — no restrictions |
| Bank LOC with specific collateral | Typically fundable with bank notification |
| Factoring company A/R lien | Fundable for inventory-secured PMSI; requires notice |
| MCA blanket lien (active) | Case-by-case; subordination request may be required |
| MCA blanket lien (defaulted) | Complex; legal review required |
| Multiple conflicting liens | Full lien review required; may require payoff of prior liens |
Interactive: PO Stepper — Lien Environment Review
Lateral Relevancy
UCC lien strategy is foundational to scaling without capital friction. See how institutional importers manage lien environments as they grow.
Ready to review your lien environment and structure a clean facility? Initialize your Funding Analysis or call (888) 653-0124.
DISCLAIMER: Sentinel Trade Finance | Carteret, NJ 07008 | (888) 653-0124 | For informational purposes only. Not legal advice. UCC filing rules and priorities vary and are subject to change. Consult qualified legal counsel before entering financing agreements. Financing subject to underwriting and approval.