- 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.
Frequently asked
How is a blanket lien different from a regular UCC lien? +
A standard UCC lien can be filed against specific collateral, like one piece of equipment. A blanket lien (a UCC filing covering 'all assets') attaches to substantially everything the business owns.
Can I get another loan if I already have a blanket lien? +
It can be harder. Because the first lender claims all assets, a new lender may have little collateral left to secure against and may require the first lien to be subordinated or released.
How do I remove a blanket lien? +
Once the loan is paid off, ask the lender to file a UCC-3 termination. Liens don't always drop off automatically, so confirm it's been released.
Last updated: June 2026