As industry participants well know, the financing of payment rights, such as accounts receivable, can take many forms, including traditional borrower/lender secured loans, trade receivables sales and other factoring arrangements, and securitizations, which can involve both sales of payment rights and financings secured by such assets. Article 9 of the Uniform Commercial Code can apply to all of these structures. In fact, UCC §9-102(a) (Scope) makes it quite clear that, subject to certain specific exceptions, Article 9 applies to any transaction, regardless of form, that creates a security interest in personal property by contract, as well as to a sale of accounts, chattel payment, payment intangibles or promissory notes.

The basic definitions of Article 9 align with this approach of applying to both an assignment of payment rights and a security interest in such assets. "[S]ecurity interest" in UCC Article 1, §1-201(b)(35) (General Definitions), includes "any interest of a … buyer of accounts, chattel paper, a payment intangible or a promissory note in a transaction that is subject to Article 9." The definition of "secured party" in Article 9, §9-102(a)(73) (Definitions and Index of Definitions), includes a "person in whose favor a security interest is created or provided for under a security agreement," as well as a "person to which accounts, chattel paper, payment intangibles or promissory notes have been sold." Finally, the definition of "debtor" in Article 9, §9-102(a)(28), includes both a "person having an interest, other than a security interest or other lien, in the collateral" and a "seller of accounts, chattel paper, payment intangibles or promissory notes."

However, UCC Article 9 itself, unfortunately, is not always consistent in its use of terminology, often referring to assignments or security interests interchangeably. According to the Permanent Editorial Board for the Uniform Commercial Code (the PEB), a committee of members of the American Law Institute and the Uniform Law Commission charged with issuing official commentary on the UCC, this is largely historical in nature and (as per Comment 5 to UCC §9-109) more of a "drafting convention."