A working capital loan is a financing arrangement with an organization to pay for its day-to-day operations such as paying vendors and employee wages. Working capital loans can take one of several forms such as simple overdraft protection (where running a checking account balance below zero results in a loan) to formal loans secured by plant assets or accounts receivable. A common type of working capital loan is factoring. This allows an organization to leverage its accounts receivables without interrupting the day-to-day operations of the firm.

Working capital is the funds used to finance the day-to-day operations of a firm. The proper definition of working capital is current assets less current liabilities. However, a more “street-definition” of the term would be cash on-hand (checking accounts, petty cash, etc).

The Uniform Commercial Code (UCC) is a set of rules and regulations to govern commercial transactions. It was first crafted in 1952 and has been enacted with differing revisions in all 50 states as the various US territories. Louisiana has enacted the UCC without Article 2 which deals with the civil laws pertaining to the sales of goods.

Also called the UCC Statement With Respect to Change, this statement records a change in the UCC-1. Most commonly, when all receivables have been collected or otherwise satisfactorily disposed of, the UCC-3 Statement is filed recording the release of any liens or other security interests established with the UCC-1.

This is a form that is used to “perfect” a creditor’s security interest in assets collateralized by debtor to secure financing. The form essentially provides public notice that the creditor intends to seize the listed assets in the event of default. By proper publication, the creditor places itself first in line for the property and thus establishes a lien on that property.