Glossary · People and paperwork
In short
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.
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.
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.
Know what you'll need before you apply
Tell us about the deal and who's buying — we'll flag the guaranty, eligibility, and paperwork issues that slow SBA approval before they cost you time.
Free · No documents · Usually same-day