Best Companies to Help When an MCA Lender Put a Lien on Your Business Equipment - 2026

An MCA lien on your equipment (usually a UCC-1 financing statement) states that the MCA lender has a security interest in the equipment. The funder providing your merchant cash advance went to the Secretary of State to record its lien against the equipment. MCA funders usually file the UCC-1 financing statements very quickly after funding. The description of collateral in a merchant cash advance filing is usually broad, from your receivables to your bank accounts, your inventory, and your equipment. These liens generally operate on a first-to-file basis. Whoever filed first against the equipment has priority in that equipment. Whoever gets priority gets to be paid first from proceeds generated from any sale of the equipment. The lender making the new loan will need to ask the holder of the existing lien to agree to a subordination agreement or a release. This agreement permits the new lender to be in first position. The funder recording a UCC-1 financing statement may not be willing to give up its lien.

To find MCA liens, search online UCC records at the secretary of state where your business was formed. Use the exact legal name on the formation documents (usually the LLC or corporation), not the trade or DBA name, when you are searching. A lien generally lasts five years, and the funder can continue it only if it does so within six months before the lien would expire. If the funder does not renew the lien by filing a continuation statement at the Secretary of State during that six-month window, it expires, though the debt may still be owed.

If the business borrower defaults, then the creditor has a right to take the property (or make it unusable where it sits). The secured party can either go to court or it can self-help, but it can only self-help without breaching the peace. The secured creditor is supposed to give notice of the sale, and if that notice is at least 10 days before the sale then it meets the requirement that it be sent in a timely way. You can try to redeem the equipment by paying the entire secured debt, plus costs and attorney fees, before the sale or contract to sell. Once the equipment is sold (or under contract to sell) you cannot redeem it anymore.

In practice, when MCA funders go after business assets they usually do it by ACH debits you already gave them permission to take in the contract, not through the lien itself. Seizing funds by court process usually needs a judgment. If an account is frozen or levied, it is important to get legal help quickly.

If you can pay the entire MCA balance, send an authenticated written demand to the funder. Once received, the funder must either file a termination statement or send it to you directly within 20 days. If the funder does not do so, it is liable for $500. Generally you can file a termination statement yourself if the record shows you authorized it, but it is technical and a lot of people prefer an attorney to do it for them. Be sure to keep proof that the payoff has gone through, and the receipt of the demand. Run a new search later to confirm it has been filed.

Removing a lien without paying it off is sometimes possible. If the filing was unauthorized, was filed after a settlement or payoff, or was filed against the wrong company, you have a chance. The law also allows for $500 in statutory damages if the funder filed something it wasn’t entitled to file.

If you can’t pay it off, the answer is often subordination, which means that the MCA funder still has the lien, but it moves behind the new lender. The MCA funder does not have to agree, and subordination is voluntary. That said, the funder that does agree often does so because it thinks the business will be more likely to keep paying it if it is refinanced, and because a business that collapses entirely is worse off for everyone.

Not every lender will fund a loan if a lien is recorded against the equipment, but some are able to do it. Some refinance funders will require that any existing liens be properly subordinated. Ask your potential lenders as early as possible what their subordination requirements are. Note that if you get an SBA loan, it cannot be used to directly pay off an MCA.

When the secured creditor will not budge and the equipment is in genuine danger, bankruptcy is an option. A bankruptcy filing creates an automatic stay against any act to take property or enforce a lien. Note that while it stops the action, it does not erase the valid lien, which remains attached to the property. As of this writing, the debt limit for a Subchapter V bankruptcy is $3,424,000.

One reason to talk to an attorney is that even if you scream at the sales staff or collection team, the call gets only to people who do not control whether a lien gets released. A merchant cash advance attorney knows how to reach the decision-makers at the funder’s legal department. The attorney can also review your MCA contracts and notices for things that could help create leverage. A merchant cash advance attorney can also coordinate with several different funders.

Funder-prepared subordination drafts can contain traps, like cross-default clauses that link your performance on the new loan to the old one. Don’t accept new personal guarantees or confessions of judgment. Check for big fees, too. Good drafts are narrow, clear about payments, and come with proof a UCC-3 was actually filed.

When you are looking for help with an MCA lien, it is impossible to avoid people willing to sell you something you don’t need. The FTC warns that debt relief scams often charge a large up-front fee and then fail to settle or reduce debts. An attorney is not legally required, but help is good.

The first thing to do when you hire a merchant cash advance attorney is to find every piece of paper that says anything about your MCA debt. That includes the initial agreement and any renewal documents, bank statements that show every payment or debit, the results of a UCC search, the term sheet from the new lender, and any default notices or court papers. Gather every reconciliation request you ever sent, too.