{"ok":true,"canonical_url":"https://dealroom.so/glossary/unsubordinated-loan","api_url":"https://dealroom.so/api/public/glossary/unsubordinated-loan","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":"unsubordinated-loan","term":"Unsubordinated Loan","group":"The loan itself","definition":"An unsubordinated loan means it has a higher claim on the business's assets or cash flow than other debts. The SBA generally requires its loan to be unsubordinated, with few exceptions.","what_it_means":"For an SBA 7(a) loan, the lender must typically be in a first lien position, meaning their claim is senior to other creditors if the business defaults. If a seller note is part of your deal, it must usually be on 'full standby' (subordinated) to the SBA loan, meaning no payments are made until the SBA loan is repaid. An unsubordinated loan would mean it can be repaid concurrently with the SBA loan, which is rarely permitted for acquisition debt.","url":"https://dealroom.so/glossary/unsubordinated-loan","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":"subordinated-debt","term":"Subordinated Debt","url":"https://dealroom.so/glossary/subordinated-debt"},{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"full-standby-agreement","term":"Full Standby Agreement","url":"https://dealroom.so/glossary/full-standby-agreement"},{"slug":"lien-position","term":"Lien position","url":"https://dealroom.so/glossary/lien-position"}],"related_questions":[{"question":"Are SBA 7(a) loans only for businesses unable to get traditional bank loans?","url":"https://dealroom.so/sba-loans/basics/are-sba-7-a-loans-only-for-businesses-unable-to-get-traditional-bank-loans"},{"question":"What exactly is an SBA 7(a) loan, and who offers these loans?","url":"https://dealroom.so/sba-loans/basics/what-exactly-is-an-sba-7-a-loan-and-who-offers-these-loans"},{"question":"How do SBA 7(a) loan interest rates compare to standard commercial loans?","url":"https://dealroom.so/sba-loans/basics/how-do-sba-7-a-loan-interest-rates-compare-to-standard-commercial-loans"},{"question":"What makes an SBA 7(a) loan 'government-backed' compared to other loans?","url":"https://dealroom.so/sba-loans/basics/what-makes-an-sba-7-a-loan-government-backed-compared-to-other-loans"},{"question":"Does the SBA check for past defaults on federal debts, like student loans or prior SBA loans?","url":"https://dealroom.so/sba-loans/basics/does-the-sba-check-for-past-defaults-on-federal-debts-like-student-loans-or-prior-sba-loan"},{"question":"How do SBA loan guaranty fees for FY2026 apply to loans below $500,000?","url":"https://dealroom.so/for-lenders/questions/how-do-sba-loan-guaranty-fees-for-fy2026-apply-to-loans-below-500-000"}]},"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 — Unsubordinated Loan","url":"https://dealroom.so/glossary/unsubordinated-loan","source_type":"DealRoom Data"}}