Legal Definitions - financing statement

A financing statement is a legal document that is filed in public records to inform potential buyers and lenders about a secured party's interest in a property or goods. This document is governed by the Uniform Commercial Code (UCC) and is used to protect the interests of the secured party.

For example, if a business takes out a loan to purchase equipment, the lender may file a financing statement to notify other potential lenders or buyers that they have a security interest in that equipment. This helps to ensure that the lender will be paid back if the business defaults on the loan.

Another example would be if a person buys a car and finances it through a bank. The bank would file a financing statement to let others know that they have a security interest in the car. This helps to prevent the car from being sold or used as collateral for another loan without the bank's knowledge.