The Most Misunderstood Tool in Credit: Preliminary Notices

If there’s one document guaranteed to make everyone nervous, it’s a preliminary notice.

Customers think it’s a threat. Sales thinks it’s a deal killer.

Upper management and accounting? They love it.

And the truth is…nobody really understands it.

Let’s Clear This Up: A Preliminary Notice Is NOT a Lien

Every time I send one, someone inevitably calls in a panic.

“Why did you file a lien against us!?”

“We’re still within terms!”

“This is going to upset our customer!”

Let’s get this straight once and for all:

A preliminary notice is not a lien.

It’s not aggressive. It’s not hostile. It’s not even personal. It’s just good business.

Think of it as your “proof of presence.”

It’s the way you raise your hand and say, “Hey, we’re supplying materials, and if something goes sideways, we’d like to preserve our right to get paid.”

You’re not accusing anyone of anything. You’re just protecting your company’s right to payment in case things go wrong later.

Why It Exists

In construction and rental industries, preliminary notices are part of the foundation of lien law.

They exist for one reason: to make sure suppliers and subcontractors get paid. Without it, if the general contractor or project owner doesn’t know you’re on the job, you could lose your lien rights entirely. That means you could deliver materials worth hundreds of thousands of dollars… and have zero recourse if no one pays.

So yes, it’s a formality. But it’s one that protects your business’s lifeline.

Why Sales Hates It (and Why They Shouldn’t)

Let’s be honest, salespeople hate these. They think sending one makes you look untrusting or difficult.

But here’s the reality: It actually makes your company look professional.

Would you rather do business with a supplier who runs their operation with structure, accountability, and compliance?

Or one who wings it and hopes everyone does the right thing?

Prelim notices don’t scare good customers. They reassure them that you take your work, and theirs, seriously.

If a customer freaks out because you sent one, that’s not a customer problem. That’s a risk signal.

The “Mean Gene” Policy on Prelims

Here’s my rule:

If it’s required in the state, we send it.

If it’s optional, we should still probably send it.

The only thing worse than a customer getting offended is a customer not paying — and you having no legal standing to collect.

Protecting lien rights isn’t mean. It’s smart. And honestly, if a polite piece of paper makes someone nervous, imagine how they’ll react when you actually need to get paid.

How to Make It Easier

The good news is, this doesn’t have to be hard.

There are modern tools like Levelset and LienWaiver that automate the whole process. They:

• Generate the correct notices for each state

• Send them automatically to the right parties

• Track deadlines and confirm receipt

That means no more spreadsheets, no missed deadlines, and no “I thought someone else sent it.”

Your lien rights stay protected, and your team stays out of the panic zone.

The Real Lesson

A preliminary notice is not a threat. It’s not a warning. It’s a receipt of responsibility. It says, “We’re on this job, and we’re serious about getting paid for it.”

That’s not confrontation, that’s professionalism. At the end of the day, you can’t deposit good intentions.

You can only deposit payments that actually arrive, and sometimes, that starts with a simple notice.