Why funders care
A federal tax lien sits ahead of most other claims on your assets. A funder taking a UCC filing behind one knows its security is worth considerably less.
It also signals a period of cash-flow difficulty, which underwriting will want explained rather than hidden.
The size relative to your revenue matters more than the raw number. A $12,000 lien against $80,000 of monthly deposits is a very different file from a $200,000 one.
What makes it workable
An agreed instalment arrangement, and evidence of payments made under it. This is the single most important document you can put in front of an underwriter.
A subordination agreement, where the taxing authority formally steps behind the new funder. It is a real process with real timelines, so start it early if the amount is large.
Consistent recent deposits. Evidence that the difficulty which produced the lien is behind you does more than any explanation.
How to approach it
Disclose it at application. It will be found — liens are public record and appear in underwriting searches — and disclosure is the difference between a manageable fact and a credibility problem.
Get on a payment plan first if you are not on one. The IRS publishes the arrangements available, and being in one changes the conversation completely.
Have the paperwork ready: the notice, the plan, and proof of the last few payments.
Expect a smaller amount or a higher rate rather than a flat refusal, particularly from revenue-based funders who are underwriting deposits.