Glossary · The loan itself
In short
This describes a lender's priority claim on a business's assets if the business defaults. As the SBA 7(a) lender typically holds a senior position, they get paid back before other creditors.
Your SBA 7(a) loan will almost always be in a senior position, meaning the bank has the first right to seize and sell collateral to recover their funds if you default. This is critical for the lender's security. Any seller note or other debt from the deal will be subordinated to the SBA loan.
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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