{"ok":true,"canonical_url":"https://dealroom.so/glossary/senior-debt","api_url":"https://dealroom.so/api/public/glossary/senior-debt","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":"senior-debt","term":"Senior debt","group":"The loan itself","definition":"Senior debt is borrowing that takes priority over all other debts if the business goes bankrupt or liquidates. Your SBA 7(a) loan is typically considered senior debt.","what_it_means":"As the primary lender, the SBA 7(a) loan will hold the first lien position on your business assets, making it senior debt. This means if the business fails, the SBA lender gets paid before any other creditors with junior claims, such as a seller note that is Fully Subordinated. This priority is a key aspect of how the SBA guaranty functions.","url":"https://dealroom.so/glossary/senior-debt","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":"first-lien","term":"First lien","url":"https://dealroom.so/glossary/first-lien"},{"slug":"ucc-lien","term":"UCC lien","url":"https://dealroom.so/glossary/ucc-lien"},{"slug":"full-subordination","term":"Full Subordination","url":"https://dealroom.so/glossary/full-subordination"},{"slug":"sba-guaranty","term":"SBA guaranty","url":"https://dealroom.so/glossary/sba-guaranty"}],"related_questions":[{"question":"Can I use an SBA 7(a) loan for debt consolidation of existing business debts?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-for-debt-consolidation-of-existing-business-debts"},{"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"},{"question":"Can I use an SBA 7(a) loan to refinance existing business debt?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-to-refinance-existing-business-debt"},{"question":"Can an SBA 7(a) loan be used to refinance existing business debt?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-refinance-existing-business-debt"},{"question":"Can I use an SBA 7(a) loan to pay off personal debt?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-to-pay-off-personal-debt"},{"question":"Does the SBA require a specific debt service coverage ratio (DSCR) for approval?","url":"https://dealroom.so/sba-7a/questions/does-the-sba-require-a-specific-debt-service-coverage-ratio-dscr-for-approval"}]},"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 — Senior debt","url":"https://dealroom.so/glossary/senior-debt","source_type":"DealRoom Data"}}