Business owners facing a UCC lien foreclosure are in a tough spot. When a business is unable to pay its merchant cash advance (MCA) debts, a UCC lien gives the lender the right to seize and sell business assets to pay off the debt.
This can be devastating for a business that relies on those assets to operate. What can a business owner do to protect their assets?
Fighting back against foreclosure
A business owner can try to negotiate with the lender to prevent foreclosure. They can offer to settle the MCA debt for a lump sum or restructure the loan to make payments more manageable. A lender may be willing to negotiate to avoid the costs and uncertainties of foreclosure.
Buying time and breathing room
If negotiation fails, a business owner may need to turn to litigation to protect their assets. They can dispute the validity of the UCC lien or challenge the lender’s right to foreclose. This can help them buy time and create a window of opportunity to find a solution.
Salvaging assets and reputation
Even in the face of foreclosure, a business owner can still take steps to minimize the damage. They can try to redeem the collateral by paying off the debt or negotiate with the lender to release the lien. They can also explore options for recovering excess proceeds from the sale of the collateral to limit their losses and protect their reputation.
Common challenges to prepare for
In addition, a business owner facing a UCC lien foreclosure can encounter challenges, such as insufficient time to respond and limited access to funds. They may also face aggressive lenders who use high-pressure tactics to collect the debt.
Protecting assets and pursuing a fair deal
The threat of a UCC lien foreclosure is a serious one, and business owners need to take it seriously. By seeking legal advice, they may better protect their assets, safeguard their rights and pursue a fair deal.