Blanket Lien - Definition
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What is a Blanket Lien?
A blanket lien is a type of lien that gives a lender the legal claim of right in all assets or a group of assets of the debtor. Generally, a blanket liens attempts secure a loan by attaching assets of the debtor as collateral.
Prior to default, a blanket lien is in the form of a security interest. In the event of a debtor default, the lien gives the lender the right to seize and sell the debtors assets. A blanket lien is otherwise called a UCC-1 lien.
Academics research on Blanket Lien
- [PDF] Measuring LGD on commercial loans: an 18-year internal study, Araten, M., Jacobs, M., & Varshney, P. (2004). Measuring LGD on commercial loans: an 18-year internal study.RMA JOURNAL,86(8), 96-103.
- Accounts receivable management policy: theory and evidence, Mian, S. L., & Smith Jr, C. W. (1992). Accounts receivable management policy: theory and evidence.The Journal of Finance,47(1), 169-200. This paper develops and tests hypotheses that explain the choice of accounts receivable management policies. The tests focus on both crosssectional explanations of policychoice determinants, as well as incentives to establish captives. We find size, concentration, and credit standing of the firm's traded debt and commercial paper are each important in explaining the use of factoring, accounts receivable secured debt, captive finance subsidiaries, and general corporate credit. We also offer evidence that captive formation allows more flexible financial contracting. However, we find no evidence that captive formation expropriates bondholder wealth.
- Current Techniques for Secured Financing of Negotiated Acquisistions in Mexico, including Analysis of Effective Use of Guarantee Trusts and Pledges without, Caviedes, H. P. G. (2005). Current Techniques for Secured Financing of Negotiated Acquisistions in Mexico, including Analysis of Effective Use of Guarantee Trusts and Pledges without Possession.US-Mex. LJ,13, 71.
- Revolving asset-based lending contracts and the resolution of debt-related agency problems, Constand, R. L., Osteryoung, J. S., & Nast, D. A. (1991). Revolving asset-based lending contracts and the resolution of debt-related agency problems.Journal of Small Business Finance,1(1), 15-28. Small firms that do not have access to organized financial markets must often rely on secured commercial loans for their debt financing. In large firms, debt-related agency problems are often resolved through the bond pricing process in the formal debt markets. When these same debt-related agency problems arise in small, private firms, the structure of the secured lending agreement must resolve these problems. This study identifies debt-related agency problems as they exist in private firms and examines howf the lending agreement resolves these problems.
- Is secured debt efficient, Hill, C. A. (2001). Is secured debt efficient.Tex. L. Rev.,80, 1117.