{"ok":true,"canonical_url":"https://dealroom.so/glossary/prior-lienholder","api_url":"https://dealroom.so/api/public/glossary/prior-lienholder","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"prior-lienholder","term":"Prior Lienholder","group":"People and paperwork","definition":"This is a lender or creditor who already has a security interest (a lien) on the business's assets. Their claim ranks ahead of new creditors unless a subordination agreement is executed.","what_it_means":"Before your SBA loan can close, any Prior Lienholders on the assets you're acquiring must agree to subordinate their claims to your new SBA lender. This often involves signing a Lien Subordination Agreement. You'll identify these parties through UCC searches and by reviewing the seller's financial statements and existing debt agreements during due diligence.","url":"https://dealroom.so/glossary/prior-lienholder","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"lien-subordination-agreement","term":"Lien Subordination Agreement","url":"https://dealroom.so/glossary/lien-subordination-agreement"},{"slug":"lien","term":"Lien","url":"https://dealroom.so/glossary/lien"},{"slug":"ucc-lien","term":"UCC lien","url":"https://dealroom.so/glossary/ucc-lien"},{"slug":"security-interest","term":"Security Interest","url":"https://dealroom.so/glossary/security-interest"}],"related_questions":[{"question":"What servicing actions require prior written SBA approval?","url":"https://dealroom.so/for-lenders/questions/what-servicing-actions-require-prior-written-sba-approval"},{"question":"What if I have a prior felony conviction on my record?","url":"https://dealroom.so/sba-loans/basics/what-if-i-have-a-prior-felony-conviction-on-my-record"},{"question":"Can a lender approve a deferment period without prior SBA approval?","url":"https://dealroom.so/for-lenders/questions/can-a-lender-approve-a-deferment-period-without-prior-sba-approval"},{"question":"Can prior bankruptcies or foreclosures impact my SBA 7(a) loan eligibility?","url":"https://dealroom.so/sba-7a/questions/can-prior-bankruptcies-or-foreclosures-impact-my-sba-7-a-loan-eligibility"},{"question":"How does a prior personal bankruptcy impact SBA 7(a) loan eligibility?","url":"https://dealroom.so/sba-7a/questions/how-does-a-prior-personal-bankruptcy-impact-sba-7-a-loan-eligibility"},{"question":"How is prior owner debt converted to equity treated for injection purposes?","url":"https://dealroom.so/for-lenders/questions/how-is-prior-owner-debt-converted-to-equity-treated-for-injection-purposes"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Prior Lienholder","url":"https://dealroom.so/glossary/prior-lienholder","source_type":"DealRoom Data"}}