You need a photocopier for your office or a truck to deliver your merchandise. You decide to sign a lease and all seems simple – but, you may find yourself in a real bind when seeking business funding, later on.
How? If the company granting you a lease files a blanket lien on all your business assets – and not just on the copier or truck – you may be blocked from factoring receivables or otherwise seeking business financial help.
Follow these steps to keep your cash flow management options free and open.
- Before signing any lease, read the agreement carefully.
- Make sure that, on any documents that you sign, you only grant the leasing company the right to file a UCC Financing Statement on the piece of equipment or vehicle in question.
- Ask for a copy of the UCC to double check the assets being used as liens.
If you’ve already signed a lease that put a lien on all your business assets, ask the leasing company to release it on your outstanding account receivables. That way, you are free to begin factoring receivables as a business funding strategy.