TLDR:
A blanket lien is a financial claim that gives a lender the right to seize all of a debtor’s assets used as collateral — covering all business assets — in the event of default.
Relevance
Common in SBA loans and venture debt. Startups should understand that a blanket lien can restrict future financing arrangements.
Why Blanket Liens Matter for Startups
A blanket lien gives the lender the broadest possible security interest over all business assets — receivables, inventory, equipment, intellectual property, and even future assets. While this makes sense from the lender’s perspective as it minimizes credit risk, it can severely restrict a startup’s ability to use its assets as collateral for subsequent financing. Venture debt, SBA loans, and many revenue-based financing facilities commonly include blanket liens, meaning founders must understand what they’re pledging before signing.