A lender's claim on assets that are pledged against a loan.

See Also

UCC, escrow, promissory note, security agreement.


A lien gives the lender the legal right to reposses property if the buyer fails to make the payments in a timely manner. If the seller is financing the sale of the business, the seller files a lien (UCC-1 statement) in the appropriate jurisdiction (normally county or state), and this gives notice to the public that the seller continues to hold a security interest in the assets of a business until the note is paid in full.