{"ok":true,"canonical_url":"https://dealroom.so/glossary/priority-security-interest","api_url":"https://dealroom.so/api/public/glossary/priority-security-interest","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":"priority-security-interest","term":"Priority Security Interest","group":"The loan itself","definition":"This grants a lender the right to be paid first from the proceeds of selling specific collateral if a borrower defaults. The SBA typically requires a first priority security interest.","what_it_means":"For an SBA 7(a) loan, the lender generally requires a first Priority Security Interest on all business assets. This means if the business defaults, your SBA lender gets paid before other creditors from the sale of those assets. This position is established through UCC filings and, if necessary, Lien Subordination Agreements with other creditors.","url":"https://dealroom.so/glossary/priority-security-interest","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"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"lien-subordination-agreement","term":"Lien Subordination Agreement","url":"https://dealroom.so/glossary/lien-subordination-agreement"},{"slug":"first-lien","term":"First lien","url":"https://dealroom.so/glossary/first-lien"},{"slug":"ucc-filing","term":"UCC filing","url":"https://dealroom.so/glossary/ucc-filing"},{"slug":"security-interest","term":"Security Interest","url":"https://dealroom.so/glossary/security-interest"}],"related_questions":[{"question":"How does the SBA require lenders to perfect security interests on accounts receivable and inventory?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-require-lenders-to-perfect-security-interests-on-accounts-receivable-and-"},{"question":"How does a lender perfect a security interest in intellectual property for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-perfect-a-security-interest-in-intellectual-property-for-a-7-a-loan"},{"question":"If the seller requires a security interest, how does it affect the standby status of their note?","url":"https://dealroom.so/sba-7a/questions/if-the-seller-requires-a-security-interest-how-does-it-affect-the-standby-status-of-their-"},{"question":"Are there specific requirements for a lender to obtain and maintain a security interest in life insurance policies used as collateral?","url":"https://dealroom.so/for-lenders/questions/are-there-specific-requirements-for-a-lender-to-obtain-and-maintain-a-security-interest-in"},{"question":"How does a lender perfect its lien on a security interest in a business's intellectual property for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-perfect-its-lien-on-a-security-interest-in-a-business-s-intellectual-pro"},{"question":"What are the specific lien priority requirements for lenders on both business and personal collateral securing a 7(a) loan, particularly when junior liens exist?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-lien-priority-requirements-for-lenders-on-both-business-and-personal"}]},"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 — Priority Security Interest","url":"https://dealroom.so/glossary/priority-security-interest","source_type":"DealRoom Data"}}