Everything is okay until you run into a situation like Finance1 described. And this has happened to everyone at some point I'm sure. Funders spend a lot of money on underwriters and cash flow analysis to determine the safest amount of money the merchant can afford to repay each month. Then another funder hops in a week later and doubles that amount. I have heard a lot of complaining in this industry about this and not enough suing. Strange, for an industry that is very litigious when it comes to merchants. So now that it may be funder vs. funder, funders are either not confident that their contracts and UCC-1s are perfected, they'd rather not spend the time and energy on it, they don't want their business to go through the scrutiny of the courts, or they don't want to create negative goodwill in the industry.

I know everyone hides their UCC-1s under aliases or doesn't file them at all to deter UCC hunters, but you may be shooting yourself in the foot when a stack funder comes along. They can claim that they did DD and argue that there was no public lien that prevented the merchant from secondary financing.