A more thorough explanation:

Definition: Notice filing is the process of perfecting a security interest under Article 9 of the UCC by filing a financing statement. This means that instead of filing a copy or abstract of the security agreement, only a financing statement needs to be filed. The financing statement must include the debtor's signature, the secured party's name and address, the debtor's name and mailing address, and a description of the types of collateral.

Example: Let's say that a business takes out a loan from a bank and uses its inventory as collateral. The bank can perfect its security interest in the inventory by filing a financing statement with the state's Secretary of State. This notice filing puts other creditors on notice that the bank has a security interest in the inventory and has priority over other creditors who may try to claim the same collateral.

Explanation: In this example, the bank is using notice filing to protect its security interest in the inventory. By filing a financing statement, the bank is notifying other creditors that it has a claim to the inventory and has priority over any other claims. This helps to ensure that the bank will be able to recover its loan if the business defaults on its payments.