UCC 9-406 Notice

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Definition

What is it: A UCC 9-406 notice is a claim introduced by a third party asserting they have the right to receive payment. It serves as a formal notification but does not inherently establish a superior legal right to the payments in question.

What is it used for: It is used by creditors, often Merchant Cash Advance (MCA) providers, to attempt to redirect a business's receivable flow from the vendor to themselves.

What it is not: A UCC 9-406 notice is not an established legal claim but rather the introduction of a claim that requires proof of assignment.

Coverage

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

Identity

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

Attributes

Key Facts
A UCC 9-406 notice is a request from a third party claiming the right to receive payment instead of a vendor. [1] [2]
Key Facts
A UCC 9-406 notice introduces a claim but does not establish one. [2]
Key Facts
The recommended response to a UCC 9-406 notice is to request proof of assignment and priority within two to three business days. [2]
Key Facts
Unless adequate proof of assignment and priority is provided, an account debtor should continue paying the vendor in the ordinary course of business. [2]
Key Facts
UCC 9-406(c) provides account debtors the right to request reasonable proof of assignment from the party issuing the notice. [2]
Capability
Merchant Cash Advance (MCA) providers often issue UCC 9-406 notices despite not holding a senior secured claim to the payments. [2]

Synonyms & Alternate Names

  • 9-406 notice

Related Entities

  • Issued By:

Provenance

Sources

  1. https://secondwindconsultants.com/resource/do-you-have-to-comply-with-a-ucc-9-406-notice (UCC 9-406 Notice)
  2. https://secondwindconsultants.com/resource/who-should-you-pay-after-receiving-a-ucc-9-406-notice (UCC 9-406 Notice)

Machine metadata