# Blanket Lien

> A blanket lien is a legal claim that lets a lender use all of a business's assets as collateral for a loan, rather than just one specific item.

## Key takeaways
- A blanket lien is a broad security interest, usually a UCC-1 filing covering "all assets," that lets a lender claim substantially everything the business owns as collateral.
- It's common with working capital loans, lines of credit, and SBA loans because it gives the lender broad, simple collateral coverage and can support better terms.
- Because it ties up nearly all assets, a blanket lien can make it harder to borrow elsewhere, and you should confirm a UCC-3 termination is filed after payoff.

## How a blanket lien works

A blanket lien is a broad security interest that lets a lender claim **all — or
substantially all — of a business's assets** as collateral, instead of pledging
a single item. It's usually created through a **UCC-1 financing statement** filed
with the state that covers "**all assets**" of the business.

That means accounts receivable, inventory, equipment, and other property can all
serve as backing for the loan at once. If the business defaults, the lender can
pursue any of these assets to recover what it's owed.

### Why lenders use them

Blanket liens are common with **working capital loans, lines of credit, and SBA
loans** because they:

- Give the lender broad, simple collateral coverage.
- Reduce the lender's risk, which can support **larger amounts or better terms**.
- Avoid having to identify and value individual pieces of collateral.

### What to watch for

- **It ties up everything.** Because the lien attaches to nearly all assets, it
  can make it **harder to borrow from another lender**, who may find little
  unencumbered collateral remaining.
- **Priority matters.** Lenders care about who filed first; a later lender may
  require the first to **subordinate** its position.
- **Release isn't automatic.** After payoff, make sure the lender files a **UCC-3
  termination** so the lien is formally removed — lingering filings can complicate
  future financing or a sale of the business.

If you're weighing an offer secured by a blanket lien, Hoss Capital can help you
understand what you're pledging before you commit.

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