Late last year I was approached by a national company soliciting services to manage UCC filings on behalf of our company. In addition to some very reasonable monitoring services, one of the pitches of this UCC representative’s offer was to use “as a representative” as the secured party.

Before we move on, I would like to give a crash course to our carriers out there on basic UCC law and what it is used for. UCC stands for “Uniform Commercial Code”. It was basically set up in the 1950’s as a way to sync state law for commercial transactions which exceed state boundaries.

For this example we will use a trucking scenario:

  • My trucking company is in Minnesota.

  • I borrow money from the bank to buy a truck.

  • The bank files a UCC statement with the state of Minnesota stating that the truck belongs to them if my company defaults on the payments.

  • Other financial institutions can publicly see these filings so they know what assets belong to the secured parties.

In a way, it is to police assets which are not fully paid for by the debtor.

Now back to the UCC filing company soliciting services to us. They offered to use their name “as a representative,” which peaked my curiosity. I learned that this is a way to disguise secured parties, such as financial institutions and other factoring companies, from being listed publicly. This peaked my curiosity even further.

  • Why would a factoring company want to disguise themselves publicly?
  • Are they shielding themselves from other competing factors?
  • Are they afraid someone could come in and provide a better service to the carrier?

I have to believe the answer is yes. Do not get me wrong, I do not believe these “as a representative” UCC filing companies are solely acting as bouncers protecting their factoring clients from other factors and financial institutions offering other solutions. This company had benefits of monitoring UCC expirations and making sure filings were up to date.

The question still stands:  Why hide yourself?

CarrierNet proudly lists its name on all of our UCC filings when securing our receivable collateral with clients. If a competitor wishes to solicit our clients, why should we take away the opportunity from our client to give the guy across the street a chance? At CarrierNet, we continue to challenge ourselves everyday in the guiding principles of customer service.

Our philosophy is that the trucking client is priority number one and if someone else wants to compete with our passion for the client, then it sounds like a win for the carrier.

Holding a contract to the carrier’s head because of differing opinions on operations is counterproductive to relationship building. One reason we do not have early termination clauses in our agreements is because it puts the pressure on us to perform. The carrier, in our guiding principle, should be able to move on freely to find the factor that fits their service and financing needs.

CarrierNet should be serving a meal to the carrier and asking how it tastes. The carrier should not be contracted to eat the same service and be forced to eat it every day. The carrier deserves better and would receive it at CarrierNet. The UCC filing service sales representative agreed on our philosophy, as well.

About the Author: Ryan Noonan

Born and raised in Sioux Falls, SD, he received his Bachelor’s in Business Administration at the University of South Dakota’s School of Business. Ryan, along with his father Jerry, founded CarrierNet with one client in 2001. The guiding principles of Carriernet were established early on with this client when a need was identified to provide a simple financing solution with an intense creation of customer service. “Going forward, I wanted to ensure every client felt the passion of why they chose us. We wanted to personally involve ourselves in their trucking company, like we were an extension of their dream. To do this, we wanted to deliver a financing solution, education of the transportation industry and personal customer service.” Outside of the CarrierNet quest for excellence, Ryan enjoys racquetball, bowling, hunting and expressing gratitude for happiness life creates.

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