Factoring companies rely on their UCC filing with the state agency to secure their position on the accounts receivables they fund. It is critical for invoice factoring to have first position on the receivables. Given the current credit climate where bank institutions are failing and/or are being gobbled up by other banks, it is essential to know what UCC filings have been made against your company assets. There could be a very old filing from a soon to be non existent bank for a small line of credit that long ago was paid off. Without formally requesting the termination of the filing, it may still show up on a filing search. Factoring companies will require these dead filings be cleared prior to any ongoing funding.
Normally when a company is looking for invoice factoring to help with cash flow, time is of the essence to get started. Having to go back and find contact info for an out of business bank can significantly hold up the process. The best measure to insure this does not happen is to contact your local state agency and request a UCC search on your company. Many states offer this online these days. But you need an official state search, to know without a doubt what your collateral status is for any future financing. If you find a dead filing, contact the institution and request a UCC-3 termination of their lien on your collateral. With that termination you can release the old filing.