Glossary · The loan itself
In short
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.
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.
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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