Glossary · The loan itself
In short
When an SBA loan's collateral is secondary to another lender's claim in case of default. This means the other lender gets paid first from the collateral's sale proceeds.
For an SBA 7(a) acquisition loan, the lender generally requires a first lien on all business assets. A junior lien position is rare and typically only allowed in specific circumstances, such as for a fully subordinated seller note. Don't plan on financing your acquisition with a junior lien on primary collateral.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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