What Is a Blanket Lien? | Business Lending Glossary

Definition

A lien that gives a lender claim to all of a borrower's current and future assets.

Explanation

Filed via a UCC-1 financing statement, a blanket lien is standard in most small-business lending. It protects the lender's position across the entire asset base — accounts receivable, equipment, inventory, and cash — without specifying individual items. Subsequent lenders can only take a junior (subordinate) position until the first lien is released.

Example

An MCA provider files a UCC-1 blanket lien on a restaurant's assets before funding, meaning any new lender would need that lien cleared or subordinated before extending additional credit.

Why It Matters

A blanket lien on your business can limit your ability to obtain additional financing until the obligation is paid off and the lien is officially released.

Frequently asked questions

How do I remove a blanket lien?

Once the loan or advance is fully repaid, the lender files a UCC-3 termination statement with the secretary of state to officially release the lien from public record.