Need Cash But Wish to Avoid Blanket UCC Liens?

Posted on June 1, 2015 by Dan Christensen

Consider a Cash Advance for Your Personal Injury Law Firm

It takes money to make money, but obtaining funds to increase business and be profitable comes with a host of risks and restrictions. If you are a personal injury attorney considering taking out a loan to cover various office expenses and advertising, consider the effects that a blanket UCC lien might have on your firm.

What is a Blanket UCC Lien?

When you apply for a business loan, such as a SBA loan, a lien may be placed against your firm. (Some banks place a lien on your business just for applying – sometimes hidden in the fine print!) A lien essentially claims that certain assets of your firm belong to the bank providing the loan, and the lien will be in effect until you pay the loan back in full. Liens are very advantageous for lenders—not so much for borrowers.

Liens can be specific in nature, only affecting assets like accounts receivable and incoming capital, or they can cover all of your business property. A blanket UCC lien affects all of your law firm assets.

There is a Blanket UCC Lien on My Firm – What Does This Mean?

A blanket UCC lien on your law firm means that the bank has ownership of your commercial assets. This includes your accounts receivables, which can create cash flow problems if the money coming into your business is bypassing you and going to the bank.

You might consider taking out a second loan just to cover basic office expenses like marketing and payroll, but if you have a lien on “future assets,” you may not be able to obtain a second loan. Even if you do, coordinating which bank controls your assets is a difficult and stressful process.

How Can I Receive Business Capital Without Incurring a Blanket UCC Lien or Violating Its Terms?

One of the best ways to fund your personal injury law firm to avoid the restrictions of a UCC lien is to apply for a cash advance. A cash advance on your contingency fees offers many advantages over loans, including:

  • A faster approval process
  • No interest payments while the case is pending
  • Less restrictions on how you use the money
  • No effect on other loans your firm may be paying off
  • No personal guarantees on the cash advances
  • UCC lien limited to just the cases pledged as collateral

Beacon Legal Funding offers cash advances to personal injury attorneys who need to increase their cash flow while awaiting the resolution of cases taken on contingency. To learn more about how we help attorneys and their clients stay afloat during litigation, call us or apply for a settlement advance via our website.


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