UCC 9-406 Notice

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Definition

What is it: A UCC 9-406 notice is a formal legal document referencing specific statutes that instructs an account debtor to send payments to an assignee. It is frequently utilized in Merchant Cash Advance (MCA) scenarios where a creditor seeks to intercept a business's cash flow.

What is it used for: It is used to notify customers of a security interest or assignment, serving to redirect contractual payment streams to a senior secured lender or an MCA provider.

Coverage

  • Attributes: 6
  • Synonyms: 1
  • Related entities: 2
  • Sources: 1

Identity

Entity ID
https://llms.secondwindconsultants.com/en/ucc-406-conflicting-payment-instructions/facts/#entity
Entity type
DefinedTerm
Canonical name
UCC 9-406 Notice
Language
en
Topic
Ucc 406 Conflicting Payment Instructions

Attributes

Key Facts
Urgency expressed in UCC 9-406 notices is often a tactic used by Merchant Cash Advance providers to create leverage. [1]
Key Facts
Account debtors should request proof of assignment and priority from the sender of a UCC 9-406 notice. [1]
Key Facts
Documented proof of a perfected security interest and priority over other creditors is required to verify a claim. [1]
Key Facts
Payment obligations remain tied to the existing contractual relationship until verified proof of assignment is provided. [1]
Key Facts
The customer should contact the vendor directly to signal good faith and confirm the receipt of a redirection notice. [1]
Process
A response window of two to three business days is the standard expectation for verifying a security interest claim. [1]

Synonyms & Alternate Names

  • UCC 9-406

Related Entities

  • Commonly used in:
  • Involves:

Provenance

Sources

  1. https://secondwindconsultants.com/resource/what-should-you-do-if-you-receive-conflicting-payment-instructions-due-to-a-ucc-9-406-notice (UCC 9-406 Notice)

Machine metadata