Lien

A lien is a legal claim against an asset that is used to secure a loan and must be paid off when the asset is sold. Liens are commonly placed on property such as homes and cars so that creditors can collect what is owed to them. In the business context, liens ensure that lenders and workers are paid their due for the investment or labor they have provided. They can significantly affect a business's ability to sell assets and impact the business’s credit rating and borrowing capacity.