An Intelligent, Assertive Lawyer In Brooklyn Serving Businesses Throughout The Nation
  1. Home
  2.  | 
  3. UCC Liens
  4.  | Do I qualify for additional funding despite having a UCC lien?

Do I qualify for additional funding despite having a UCC lien?

On Behalf of | Jul 4, 2024 | UCC Liens

A UCC lien can be an effective way for lenders to secure loans by covering specific assets as collateral. Still, it can become a double-edged sword, considering how it can put debtors in challenging situations when the amount they borrowed is still insufficient for them to run their businesses.

While most loans with applicable UCC liens tend to be more flexible and significant in value, a business owner may require additional funding depending on the circumstances. Fortunately, there are ways for them to seek other financing options despite having UCC liens.

What funding options to consider

If someone already has a UCC lien, they may have limited ways to seek additional financing. One of the most straightforward methods is to borrow from another lender using a different collateral. However, this option can be risky since it can increase the borrower’s financial obligations.

Another way to access funding is by initiating discussions with the lender to determine if they can release some assets from the UCC lien. Then, the borrower can use them as collateral for additional loans. Aside from these options, some lenders may grant loans based on a second-position lien. It could be an unusual arrangement but may become viable if the borrower has the qualifications.

Knowing how to approach UCC lien issues

Aside from limitations on getting additional funding, it is possible to face other issues because of a UCC lien, such as overwhelming payments and aggressive collection methods that may become unethical. When these issues arise and grow severe, consider seeking legal help immediately. Experienced insight from a litigator could help determine the appropriate approach to address these issues, which may be crucial when people’s jobs and livelihoods are on the line.