Glossary · The loan itself
In short
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.
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.
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.
See which SBA lenders would fund your deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to approve a 7(a) like yours and flag what trips up approval.
Free · No documents · Usually same-day