Get on an IRS payment plan.
An active installment agreement shows the balance is being managed, which makes more lenders comfortable.
A tax lien feels like a locked door — banks go quiet, and you assume no one will lend. The reality is more hopeful: a lien narrows your options and raises cost, but financing is often still on the table, and the right loan can even clear the lien.
A tax lien is a government claim against your assets for unpaid taxes — and it's usually public. The issue for a lender isn't just that you owed taxes; it's priority. A lien can put the taxing authority ahead of other creditors, which weakens a lender's collateral position if things go wrong. That's the real reason a lien lowers approval odds and raises cost: it's about who gets paid first, not just your credit.
That priority problem is exactly what every workaround targets — either fixing it directly or sidestepping it with revenue-based or asset-based structures that lean less on collateral.
| Option | How it handles the lien | Speed |
|---|---|---|
| Working capital loan | Many short-term lenders fund despite a lien if revenue is strong | 1-3 days |
| Revenue-based financing | Repaid from sales, so less reliant on collateral priority | 1-3 days |
| Invoice factoring | Based on your customers' credit, not just yours | 1-3 days |
| Equipment financing | Secured by the equipment itself | 1-5 days |
| SBA / bank loan | Usually needs the lien resolved or subordinated first | 30-60+ days |
Most lien situations resolve along one of these routes:
An active installment agreement shows the balance is being managed, which makes more lenders comfortable.
The IRS can agree to let a new lender's claim sit ahead of the lien — often the single change that gets a cautious lender to yes. It's situation-specific and has a formal process.
If the lien itself is the blocker, financing that works with liens can pay off the balance — reopening cheaper bank and SBA options later. See using a loan to pay the IRS.
State vs. federal: state tax liens work similarly but rules differ by state. The general principles — priority, payment plans, subordination — still apply, but confirm specifics for your state.
This article is general information, not tax, legal, or financial advice, and not an offer of credit or a guarantee of approval. Tax lien rules, subordination, payment plans, and releases (federal and state) are complex and situation-specific — consult a qualified tax professional or attorney. Options and terms vary by lender and your business profile. Apply for real terms.
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Federal or state, the amount, the date filed, and whether you're on a plan. This shapes every option.
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Ask about payment plans, subordination, and whether the lien can be reduced or released.
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Clean bank statements and steady revenue make lien-tolerant lenders more comfortable — see improving your approval odds.
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One application reaches lenders that work with tax liens, so you can see real options instead of guessing.
People use "getting rid of a lien" loosely, but the IRS offers several distinct remedies, and knowing which one applies changes your options. They're not interchangeable:
the lien is satisfied and removed, typically once the debt is paid in full (or otherwise resolved). This is the clean outcome that fully reopens bank and SBA financing.
the IRS removes the public Notice of Federal Tax Lien, which can happen in certain situations even while a balance remains, for example after entering a qualifying direct-debit installment agreement. A withdrawal can meaningfully improve how lenders and credit view you.
the lien stays in place, but the IRS agrees to let another creditor's claim take priority ahead of it. This is the tool that lets you borrow despite an unresolved lien, because it fixes the lender's collateral-position problem.
For borrowing purposes, subordination is often what gets a deal closed that couldn't close otherwise, while a withdrawal or release is what restores your access to the cheapest financing over time. Which is realistic depends on your balance, your payment history, and whether you're on a plan — a tax professional can tell you quickly which door is open.
Federal vs. state. State tax liens follow similar principles but their own procedures, timelines, and relief options, which vary by state. The strategic picture is the same — resolve, subordinate, or borrow around it — but verify the mechanics for your specific state rather than assuming the IRS process carries over. Either way, a filed lien is a problem to manage, not a permanent door slammed shut.
If you take one thing away, let it be the order of operations. First, get the facts — federal or state, the balance, the date filed, and whether you're already on a payment plan — because every option depends on those. Second, get on a plan if you aren't, since an active installment agreement both calms the taxing authority and reassures lenders. Third, decide whether to resolve the lien or borrow around it, weighing the cost of lien-tolerant financing against the savings of reopening bank and SBA options. Worked in that order, with a tax professional in the loop, even a serious lien usually has a path through it. What traps most owners isn't the lien itself — it's assuming it's a dead end and never asking, while penalties grow and options quietly narrow. Asking early is what keeps the path open.
Apply once and compare lenders that work with tax liens — no obligation, no impact from just exploring.