Yes. 'Cash' loans most effectively equity-strip property, but they have their drawbacks. Your lender pays taxes on your interest payments, and you may not be able to fully encumber your assets through standard commercial lenders. You must also pay interest, or not have the credit, collateral or resources to fully equity-strip your property.
But obligations aside from cash loans can justify the lien. Liens secure a variety of obligations in the normal course of business. These executory obligations are as valid as cash loans. In fact, a lien securing an executory obligation is sometimes better than a lien securing a cash loan because there are generally no negative tax or economic consequences to fulfilling the obligation. You can also arrange for the lien not to be reduced until you fulfill your obligation. The lien amount can even grow until the obligation is fulfilled. You have no loan proceeds to protect, nor will cash shortages affect your ability to fulfill non-monetary obligations. You also need not worry about how to get $500,000 to equity-strip your $500,000 home or office building. Cash loans are easily quantified. You can't use a large lien to secure a small loan. However, executory obligations are difficult to quantify. You can easily match the obligation to the value of the encumbered property.
As with any strategy, there are alternate ways to achieve a specific objective or goal. Can your lien secure an existing loan? Can you give a lien to secure a contract, such as a lease, or subscription to buy an interest in another entity? What other obligations can you collateralize? What future or contingent liabilities might you secure?
We can arrange one loan package which would lien everything you own – your home, commercial properties, investments, vehicles, business interests and any other valuable asset. Titling each asset to its own best protective entity, and then creating an enforceable blanket lien is the ultimate asset protection plan – particularly when the equity in the form of the loan proceeds has been constructively shifted to an international asset protection entity.
