Title Image

Silent Liens and Their Risks to Lenders

Silent Liens and Their Risks to Lenders

Silent Liens and Their Risks to Lenders

Silent liens refer to a lien that is not on any public record. The IRS uses this type of lien to invoke a more aggressive approach to collecting unpaid taxes on the lien when other methods have failed. This can cause many problems for a company, as the IRS does not need to give any sort of warning before seizing property from the individual or company.

When businesses are faced with financial trouble, they often prioritize company liabilities first, such as payroll or vendors, before paying taxes. The obviously wary IRS will then place a statutory or silent lien on the company, which allows them to apply for a loan from a bank without the lender knowing of the unpaid taxes. While a normal lien will drive down the firm’s credit score, a silent lien allows a business to perform its monetary duties without the burden of its poor solvency. A silent lien lasts on average for 446 days, meaning companies have little over a year to settle their tax disputes.

Lenders are put in a precarious position thanks to these silent liens. Even in the best-case scenario, their loan will be used to pay the overlying taxes and keep the company’s credit score stable, but it will still need to perform its market responsibilities in order to pay off the loan. Instead of applying a higher interest rate to a riskier client, banks are otherwise unaware of the underlying uncertainty. The best thing a lender can do is to understand the risks behind using solely public record searches.

When an investor is planning on putting their money into a new asset or security, they are often warned of the perils of using only one method in their analysis. Public records are no different. While they are commonly used to assess the previous performance of a potential client, they do not incorporate the potential downside of a silent lien.

Have lending questions? Contact us for more information.

Coming Soon!

The New Private Eyes Platform.

Background Checks | LegacyLender Solutions | Login

For any questions contact us at (925) 927-3333.

Site Security Notification

 

Use the buttons below to continue your login.

For SITE SECURITY purposes and to ensure that this service remains available to all users, this computer system employs software programs to monitor network traffic to identify unauthorized attempts to upload or change information, or otherwise cause damage. Unauthorized attempts to upload information or change information on this service are strictly prohibited and may be punishable under the Computer Fraud and Abuse Act of 1986 and the National Information Infrastructure Protection Act.

NOTICE: We will not obtain personally-identifying information about you when you visit our site unless you choose to provide such information to us.

Point of Contact for Security and Monitoring: Frank Santa Elena email: security@pebackgroundchecks.com Information Systems Security Officer (ISSO) for www.privateeyesbackgroundchecks.com phone (925) 927-3333.

For any questions contact us at (925) 927-3333.

Find the Right Lender Solution

Fill out the information below and we will contact you or call us at 925-927-3333



First Name*
Last Name*
Email*
Phone*
Company*
Street
City
State
Zip Code
Number of Employees
Where did you hear about Private Eyes?

Find the Right Background Screening Solution

Fill out the information below and we will contact you or call us at 925-927-3333.



First Name*
Last Name*
Email*
Phone*
Company*
Street
City
State
Zip Code
Number of Employees
Where did you hear about Private Eyes?

Candidate Assistance

If Private Eyes is running your background check, please contact our Customer Service department. A person on our team will be more than happy to assist you

Email: CSS@pebackgroundchecks.com
Call: (925) 927-3333

Private Eyes Customer Assistance

If you are a current customer, please contact our Customer Service department. A person on our team will be more than happy to assist you.

Email: CSS@pebackgroundchecks.com
Call: (925) 927-3333