Definition: A lender’s claim on assets that are pledged against a loan. 

See Also: UCC, escrow , promissory note , security agreement .

Tips: A lien gives the lender the legal right to repossess 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.